Startup culture booming in Bangladesh

Experts stress more local investment in startup ventures

Jannatul Islam

4 March, 2021 12:00 AM printer

Startups have emerged as a potential sector for local and international investors as the government continues to provide policy support to this new segment of the business.

Talking to the Daily Sun, government officials and fund managers said the participation of local corporations in supporting startups can open up new possibilities to drive the digital economy.

According to a recent report, the investments in 78 Bangladesh startups stood at $317 million till February this year from only $5 million in 2010. The study also showed a little participation of local investors as 95 per cent of investment comes from foreign investors.

Bangladesh Securities and Exchange Commission (Bsec) Chairman Shibli Rubayat Ul Islam said the interest to invest in Bangladeshi startup companies through venture capital grew in recent time.

“I was working on a policy to support the startups when I was a dean at Dhaka University. From Bsec, we are providing policy support to encourage investment in startups. Many new companies are now interested in venture capital,” Prof Shibli Rubayat Ul Islam told the Daily Sun.

A startup is a young company founded to develop a unique product or service and bring it to market.

Venture Capital and Private Equity Association of Bangladesh (VCPEAB) has been working over the last five years as a platform of local and international fund managers.

Fund managers said the return from investment in a startup comes after a term of five or ten years, as a result, the participation from local businesses is lower despite policy support from the government.

VCPEAB founding chairman Shameem Ahsan mentioned the culture of invest in startups is yet absence among Bangladeshi businesses which is popular in other countries.

“Investment in startup happens through two types of partnership --- General Partner and Limited Partner. Big corporations and conglomerates can invest in startups for long terms to make multiple returns. However, there is a lack of awareness in our country to invest in new businesses like startups,” Shameem, also a general partner of Pegasus Tech Venture, told the Daily Sun.

He also mentioned that Bangladesh Bank should formulate a fund for supporting the startups as they pledged in the current monetary policy.

The big companies like SpaceX, Sony, and Mitsubishi, all are investing in startups for a term of 5 to 10 years through respective fund managers, according to the investor.

At present, some 18 local and 10 foreign venture capital firms are involved in startup fund management in Bangladesh.

Former Prime Bank deputy managing director Shawkat Hossain said the revenue authority and security exchange commission should reform the policy to encourage local investment in startups.

“There should some rebates for the investors as there is a fear of risk in such a new type of business. However, many initial investors in Pathao and bKash got multiple times of return through a term investment. We should raise awareness on potentials of startup businesses to attain the national goal of export earning worth of $5 billion by 2025,” Shawkat Hossain, director of financial Inclusion and investments at LightCastle Partners, told the Daily Sun.

Meanwhile, the government has formed a public company titled Startup Bangladesh Limited to support startup companies.

Under this programme, there are different categories of startups including, agriculture, animation, business services,  communication media, consumer product and service, e-commerce, education, environment, financial service, gaming, healthcare, human resources, infrastructure, manufacturing, mapping service, media and entertainment, power and energy, waste management, fashion, safety security, robotics, search engine, social enterprise, sports, logistic and tourism.

Following the tech-enabled new entrepreneurship culture in Silicon Valley of United States; the startup system has been developed in Bangladesh in the early part of this decade.   During the year 2012 to 15, the concept of startup took the time to get a shape. From 2015, the startup culture became popular among the young entrepreneurs in the country as home-grown ride-sharing service Pathao hit the street competing with multinational brands. Startup ventures witness a boom in Bangladesh with the rise of local startups like,, Gaze.AI, Chaldal, HungryNaki and