Investments in Bangladeshi startups fell substantially in the first quarter of 2024, down 70 per cent from the previous quarter and 82 per cent from the same period last year. Only four startups received venture capital funding, marking a considerable decrease from the previous year. This decline has been attributed to an investment crisis, a lack of autonomous company concepts, and a lack of market awareness. The most recent update on a few firms casts doubt on the industry's long-term viability. This year, industry sources have noticed a considerable number of job applications from executives departing high-growth businesses such as ShopUp and Foodpanda.
These startups are said to have reduced a significant number of direct positions over the last 15-17 months. While ShopUp disputed the assertion of employment cuts, the reduction in office floor space and the transition to a single-level workplace appear to coincide with the purported employment layoffs. In 2023, just a few startups emerged as net job producers, such as Sheba Platforms, Pathao, and Steadfast. During this crisis, the government has stepped in to provide money when foreign investors are hesitant. Startup Bangladesh, a state-owned venture capital firm, has supported several dozen potential enterprises. The government intends to create 50 homegrown unicorn firms by 2041, creating one crore jobs. MFS players bKash and Nagad are acknowledged as the country's two unicorn startups, with a market capitalisation of more than $1 billion.
Recently, SBK Tech invested $7.1 million in six Bangladeshi firms, with 10 Minute School receiving $1 million. Markopolo and Arogga, both led by women, got $1.5 million and $1 million respectively. These investments generally refer to smart business solutions and technology-enabled services that are accessible to the general public. SBK's investment in Markopolo benefits small and medium-sized businesses. Meanwhile, 10 Minute School, Bangladesh's leading K12 and skill development edtech platform, is being acknowledged for its innovative role in revolutionising the education industry.
Startups should take note of vital messages from the government's key bodies regarding growth policy and capital management. Bangladeshi entrepreneurs will be able to raise capital from the stock market. According to IT industry analysts, the continuation of tax exemption is critical for tech startups in particular. The present income tax law exempts the IT-enabled sector from tax until 30 June 2024. Entrepreneurs are seeking the prolongation of this exemption until 2041, in line with the government's 'Digital Bangladesh' goal.
Fariya Tabassum Piya
Student of BBA
North South University
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