The Bhutanese Leading the way.
In a major push to strengthen Bhutan’s startup ecosystem and private sector, the government has announced a USD 100 million initiative aimed at fostering entrepreneurship, innovation, and economic growth. The program is designed to provide structured funding and capacity-building support for startups and small to medium enterprises (SMEs), with a focus on high-potential sectors, such as technology, manufacturing, and green energy.
The fund will be strategically allocated based on national economic priorities, targeting industries with significant growth potential. While specific allocations are still under discussion, emphasis will be placed on technology-driven businesses, sustainable manufacturing, and renewable energy initiatives.
The government will play a facilitative and oversight role, working closely with an experienced venture capital (VC) firm to manage operations, ensure transparency, and maintain regulatory compliance.
The initiative aims to support Bhutanese entrepreneurs, including those expanding into global markets. While detailed eligibility criteria are still being developed, the fund is expected to support startups, SMEs, and high-growth businesses with scalable and innovative models.
Applications will be assessed based on key factors such as business viability, scalability, market potential, innovation, and financial sustainability. The selection process will be refined during the implementation phase by the VC firm managing the fund.
The initiative will primarily focus on equity-based investments, though other financial instruments, such as low-interest loans and grants, may also be explored. The funding amount for each startup will vary depending on the business stage and investment needs, with limits to be determined within the fund’s governance structure.
Beyond financial assistance, the program will offer non-financial support, including mentorship, accelerator programs, and business development services. These resources aim to enhance the success rate of funded businesses and ensure their long-term sustainability.
To maintain transparency and fairness, the initiative will implement strong governance mechanisms, independent evaluations, and periodic reporting. Strict due diligence, performance monitoring, and compliance measures will be enforced to prevent fund misallocation or misuse.
Additionally, the program aligns with Bhutan’s long-term vision of transitioning into a high-income economy by fostering innovation-led growth and strengthening the private sector’s role in national development.
While the initiative aims to bridge the financing gap for startups, potential challenges include infrastructure readiness, regulatory adjustments, and maintaining investor confidence. These will be addressed through strategic planning and partnerships.
To ensure funded startups remain competitive, businesses will receive ongoing mentorship, global market access support, and advisory services. Additionally, tax incentives or other policy measures may be explored to encourage entrepreneurship, with discussions currently underway.
In the event of business failure, accountability measures will be in place, requiring funded startups to adhere to reporting requirements. Risk management strategies will be embedded within the fund’s framework, recognizing that risk-taking is an inherent aspect of venture capital investments.
The government will select a professional venture capital firm as a partner with the government putting in USD 50 mn and the other half being put in by the partner firm.
