KPMG and Bahrain EDB Host Seminar on Convertible Notes for Financing Start-Ups

Bahrain Economic Development Board (Bahrain EDB), recently collaborated with KPMG to host a  seminar titled “Interpreting Convertible Notes”,  which discussed the use of the financial instrument in financing startups and new business ventures in the Kingdom of Bahrain.

The seminar provided key insights on addressing common challenges facing business owners and entrepreneurs, in the likes of raising capital, elaborating on the concept and approach of using and issuing convertible notes in Bahrain as a potential solution for financing.

Several legal specialists and field experts took part in the seminar, including Nicolas Ribollet, Partner and Head of Deal Advisory at KPMG; Dr. Jameel Al Alawi, Senior Legal Advisor at Bahrain EDB; Camille Geadah, Director of Deal Advisory Services at KPMG; Harish Gopinath, Partner & Head of KPMG Enterprise in the MESAC Region; Jarmo Kotiliaine, Chief Strategy and Data Analytics Officer at Tamkeen; Dalal Buhejji, Executive Director – Financial Services at Bahrain EDB; Steven Brown from ASAR; Benjamin O’Brien-McQueenie from Trowers & Hamlins; William Reichert from Charles Russell Speechlys; and Suhail Algosaibi, Chairman of Tenmou and & CEO of Falak Consulting.

During the seminar, discussions around convertible bonds were additionally held from a legal and economic point of view. Angel investor Suhail Algosaibi also shared his experience in using the bonds.

Commenting on the sidelines of the seminar, Dr. Jamil Al-Alawi, Senior Legal Adviser at the EDB, said: “During the discussions we evaluated the use of convertible bonds as an attractive option to raise capital for businesses, especially start-ups and small to medium enterprises across international markets, considering the evolution of the financial instruments over the years into more modern and simplified instruments for businesses to raise capital.”

“These bonds play an important role in further enhancing the business-friendly environment in the Kingdom, and we expect them to contribute to easing the journey of business owners in raising capital,” he added.

Nicolas Ribollet, Deal Advisory Lead Partner at KPMG in Bahrain, said: “I am pleased to have worked with the Bahrain EDB on developing a publication titled ‘Interpreting Convertible Notes’, a useful guide on the newly introduced fund-raising instrument. Bahrain’s ecosystem and strategic location at the heart of the GCC continues to make it the perfect environment for startups to find all resources to test, launch, grow, and scale to the regional market.”

“I believe introducing Convertible Notes in the Company Law is a positive step towards facilitating the fund-raising process for startups and private companies, placing Bahrain in the forefront of innovation as the first country in the GCC to have legislated for and allowed convertible notes.”

Dr. Jarmo Kotiliaine, Chief Strategy and Data Analytics Officer at Tamkeen, said: “It’s important to have new tools to improve start-up access to financing, which ultimately supports economic diversification. This is especially important for technology-based start-ups, which have financing needs that are often difficult to meet through traditional channels. Having convertible notes expands the menu of options, builds confidence, and offers flexibility. Convertible notes are particularly attractive because of the simplicity and speed of tapping into funding.”

Dalal Buhejji, Executive Director of Business Development – Financial Services at Bahrain EDB, said: “Through this seminar, we intended to shed light on the importance of alternative means of financing in the growth of SMEs and startups. We are always keen on introducing new tools, such as venture capital funding, crowdfunding, and convertible notes, which encourage the generation of an innovative ecosystem by having varied options of funding available.”

“In view of the fact that  SMEs and startups require different kinds of funding to grow and expand, in parallel, this further contributes to supporting the growth of the private sector as it provides options for investors to diversify their portfolios from traditional investments to non-traditional startups. Convertible notes are a great tool for investors to demonstrate their confidence in the business, thereby creating a sustainable foundation for growth,” she added.

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