…Himalayan Food raised Nu 4.5M from public
When graduates of Gaedu College of Business Studies were busy preparing for their civil service examination in 2017, Bikash Gurung and Tshering Dorji was dreaming.
Today, when others are hunting for a job, the duo started Himalayan Food, a start up. They even managed to raise Nu 4.5M from the Bhutan crowdfunding platform to expand their start up.
Bikash Gurung said that after winning the business idea competition, they went forward to avail financing from the priority sector lending (PSL) scheme. With the equity injection of Nu 3.2M and PSL funding of Nu 4.3M, the duo began producing agri-based snacks such as potato crispy chips and banana crispy chips. “Our products are doing well and we received good feedback. But we were only able to supply in Thimphu and Paro,” Bikahs Gurung said.
Raw-materials are collected from local farmers and Himalayan Food already is manned by skilled technicians and a chemist to maintain quality includig packaging.
They needed Nu 7M more to expand.
Then came the angel investors, Jabchor platform initiated by the Royal Monetary Authority (RMA). They fetched Nu 2.5M from there.
Having received a special recognition at the Bhutan Economic Forum for Innovation and Transformation (BEFIT) earlier this year, where the Bhutan Crowfunding Portal was also launched by the Royal Securities Exchange of Bhutan (RSEB), equity shares of Himalayan Food was offered to the public through crowdfunding.
Himalayan Food is the second startup to have successfully raised the capital from crowdfunding platform, after the Bhutan Alternatives. About 45 percent of the stakes are subscribed by institutional investors while individual investor has taken the remaining 55 percent. Public now owns 18 percent of the shares (450,000 shares at face value of Nu 10, amounting to Nu 4.5M). In total, the startup has offered 30 percent for its shares for investors.
“It was a challenge to convince people to invest because of lack of trust in a startup. But we also came across people who were interested and encouraged us,” Bikash Gurung said.
Himalayan Food now aims to diversify few more premium products such as fruit based vacuum freeze fries and nut-based products. “We are also working on ISO certification to penetrate in the export market, which required international standard packaging,” he added.
Meanwhile, another firm, ‘One Click Shop’ has raised more than Nu 2.3M of the Nu 8.5M offer. It has four more days to garner support from its investors.
Freelancer Bhutan, another startup has decided to withdraw from Bhutan Crowdfunding to rework on its business model. They are expected to rework on their business strategy, create a new prototype and come back to the platform.
RSEBL CEO Dorji Phuntsho said that it is a historical breakthrough for a startup to transform into a formal corporate culture from a sole proprietorship,” said.
Given that startups are untested in the economy, officials said that it also becomes the responsibility of the RSEB to protect investors and ensure success. This is why the stakes are small, meaning investors in crowdfunding suffer least shocks if the business fails because the size of investment is also small.
From the macroeconomic perspective, when small companies scale up, the immediate impact is on the employment generation. Subsequently, there would be demand creation and through the revenue and taxes, it will contribute to the fiscal balance of the government.