Mycelium SME Fund launches US$ 50mn private equity drive in SL and B’desh

A US$50 million private equity fund targeting small and medium-sized enterprises (SMEs) in Sri Lanka and Bangladesh has been launched, aiming to provide growth capital to high-potential businesses in both countries.

The Mycelium SME Fund (MSF) is the first independent, homegrown initiative of its kind in the region, backed by private equity and venture capital industry veterans. 

The fund will focus on companies with high-value addition and sustainable business models, while also promoting intra-regional investments through expansion initiatives and joint ventures.

Colombo based co-promoter of the fund Indika Hettiarachchi said the proposed investment programme is expected to boost high quality FDIs to both countries in the medium term. Countries such as Sri Lanka and Bangladesh receive significant part of FDI inflows through Mergers and Acquisition (M&A) and strategic/principal investment route as compared to Greenfield projects, which require lengthy processes and pose many risks.

“Both countries have seen a healthy increase in FDI entries through M&A and principal route during last two decades and we believe our investment programme can attract global multinationals into the region while achieving good returns to investors,” he said.

Dhaka based co-promoter of the MSF, Nazmul Karim noted that although not many investors are aware, Sri Lanka is a major source of FDI inflows to Bangladesh and many Sri Lankan businesses are already doing well in Bangladesh.

“We understand that there are over 1,000 Sri Lankan businesses keen on expanding to Bangladesh and we are also aware of many Bangladeshi businesses looking for Sri Lankan business partners,” said Karim.

MSF targets to close at least two investments during next 12 months.