A spokesperson for one of the key organisations tasked with supporting the business startup environment in Malta, Malta Enterprise (ME), has issued an impassioned defence of the country’s environment, calling it “alive, improving and promising.”
Responding to questions from BusinessNow.mt in light of the environment being characterised by a startup formerly based in the country as “costly, bureaucratic and frustrating,” the organisation’s head of external communications, Anthony David Gatt strikes a reconciliatory tone, acknowledging that despite ME and Malta’s businesses successes, constructive criticism remains “vital.”
The departure from Malta, or collapse of startups is not necessarily an indictment of the whole environment or the support offered by Malta Enterprise, he insists.
“While we will continue to do our best to assist them, it is only natural that some startups do not succeed, and a substantial amount do fail.”
However, Mr Gatt is resolute that ME will continue to strive to support businesses: “As long as we keep on giving our startups the level of attention they deserve and as long as we face our challenges rather than shying away from them I would say that we are on the right track.”
How applying for startup support works
One of the key complaints made by foundling businesses about Malta Enterprise relates to the processing time for some of its applications.
Indeed, Stephen Arnold, whose aforementioned scathing rebuke of Malta’s startup environment earlier this month sparked discussion and introspection in the country’s wider business community, identified the “lengthly” application process as of particular issue to his company.
This processing time, with relation to start up support schemes, currently stands at between six and 10 weeks, and involves several steps from both ME and the client’s end, according to Mr Gatt.
“At the end of the six to 10 week period – whereby Malta Enterprise would have conducted checks on shareholders, financial viability and received clarifications from the client – the applicant would be officially notified if their application has been approved or rejected,” he explains.
In the case of startups, Mr Gatt identifies that the organisation may provide support from as early as the ideation stage. The startup then creates an outline plan to use for analysis, before being required to provide a business plan.
As of this year Malta Enterprise is also making up to €5,000 available to startups that would need funds for recruiting consultants to develop business plans and financial forecasts.
Additionally, via the BStart scheme, Mr Gatt explains that eligible startup founders can claim renumeration of up to €500 a month for part timers and €1,000 for full timers.
The BStart scheme has a ceiling of €200,000. Another measure which is also popular with startups is Startup Finance – a repayable advance with a ceiling of €800,000, he adds.
In case of a successful application an offer for support in the form of ‘Letter of Intent’ would be sent to the client in digital form and a hard copy would follow by traditional post.
Problems to be addressed
Despite his overall positivity, the spokesperson did concede that both ME and the wider startup environment in Malta has room for improvement. As such, he believes feedback is “crucial” in generating policies that can help address industry trends.
“Other announcements planned for later in the year will provide concrete result on this front aswell,” he states.
Regarding the wider environment, Mr Gatt identified problems around banking, investor shortages, and workforce limitations as some of the key problems facing the industry.
“First and foremost – the challenges of banking and the reality of the need of further investors around the ecosystem. On this front our efforts to find innovative banking and payment solutions and to attract new investors are incessant.
“Malta’s recent success in attracting startups needs to be supported by a larger human resources pool with the relevant skill set. Our educational institutions need to do more in understanding the specificity of these skillsets,” he explains.
The shortage of investors was also acknowledged by Mr Arnold, who explained how his company had failed to gain funding from local investors.
Despite the criticism, and despite his acknowledgement of shortcomings, Mr Gatt insists that the achievements of the organisation, as well as the environment are not “sidelined”.
Specifically, he pointed to Malta Enterprise’s support of a number of “exciting prospects” over the last months, including local startups FreeHour, Fortify and Raven and promising foreign outfits like TrustStamp, Omniscope, ActableAI, Modl.AI, NARC, Few ltd, Vital4Data.
Asked about the impact of COVID on the operations of ME, Mr Gatt recognises that the pandemic has “taken a toll” on the workload handled by employees, who almost overnight became responsible for the monthly wage supplement to 50 per cent of all of Malta’s workforce but insists that this strain has not dented its resolve to give the best assistance possible to startups.
Indeed, the spokesperson explains, in early 2021, ME launched the StartinMalta initiative, which aims to act as the go-to repository of information and synergising of the local startup ecosystem.
Mr Gatt credits the organisation’s efforts during the period with a dramatic increase in applications for startup assistance received between January and June 2021 which hit 73, compared to 46 applications a year earlier.
Looking forward, he presents an optimistic outlook, suggesting that the impact of ME’s efforts would be notable in the coming months.
“Notwithstanding the increased interest in our schemes due to further visibility and the increased workload, the team is still managing to support local startups, attracting foreign startup investment, and creating innovative initiatives – as will be clearly visible in Q4 this year.”
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