In June 2010, SEAF launched a new commercial finance company to invest in small and medium enterprises (SMEs) in Bangladesh. SEAF Bangladesh Ventures (SEAF BV) will provide SMEs with structured capital and quasi-equity investments. This is the first finance company to focus exclusively on providing growth and working capital to promising companies of this size in Bangladesh. SEAF BV was conceived through the International Finance Corporation’s (IFC) SME Ventures Program – an initiative designed to support risk capital financing to SMEs in underserved emerging markets. SEAF BV focuses on key sectors in Bangladesh that represent strong growth opportunities but lack access to traditional sources of finance.
In May of 2017, the Fund received a follow-on commitment of USD 10 million from the International Finance Corporation (IFC) and Climate Investment Funds-Pilot Programme for Climate Resilience (CIF-PPCR). CIF-PPCR is allocating capital in the form of grants and financing to Bangladesh, which is targeted to “enable Bangladesh to make strategic investments in critical areas of climate resilience planning and implementation in a manner consistent with its poverty reduction and sustainable development objectives.”
Since declaring independence in 1971, Bangladesh has grown to a population of over 150 million with a GDP of over $100 billion that has seen consistent growth in recent years. Bangladesh demonstrates attractive demographic trends, such as a large, young workforce and a growing middle class that drives strong domestic consumer demand. In addition, Bangladesh is located close to key emerging markets such as India and China and boasts the lowest labor costs in the region. SEAF BV aims to capitalize on these positive macroeconomic themes by investing in growing SMEs in Bangladesh. SEAF BV will invest in these SMEs primarily through unsecured, high-yielding instruments with cash-pay components and equity participation. The finance company will also offer strategic advisory and business support services to investees in order to facilitate growth.
SEAF BV is managed by SEAF Ventures Management, a wholly-owned subsidiary of SEAF, with its team members based in Dhaka, Bangladesh. SEAF is supported by Venture Investment Partners Bangladesh (“VIPB”) as a technical services provider. VIPB has a strong track record as an investment manager in the SME sector in Bangladesh, focusing primarily on micro-finance graduates. VIPB offers SEAF a strong pipeline of investment opportunities through its existing portfolio of growing enterprises and its nationwide network of field units.