A vista of investment prospects is drawn by an agency that says Bangladesh can hope to raise US$1.5 billion with startups in few years with strong government support and a thriving local ecosystem in place.
A report by LightCastle Partners states that initiatives like the National Startup Policy, Fund of Funds, and Shark Tank will further propel startups to showcase their innovative solutions on public platforms, increasing their chances of securing funding.
Since 2013, local startups in Bangladesh have raised $989 million, with a record-high $435 million in 2021.
However, in 2024, the top eight startups sectors raised nearly $35 million, marking a decline of over 36 per cent compared to that of 2023, for adversities especially on the political front.
Logistics and mobility startups led investments in 2024, raising $13.5 million, with Pathao alone securing $12 million. The financial services sector followed with $7.6 million, driven by ShopUp's $6.5 million.
Energy and climate startups garnered $3.3 million, including Solshare's $1.2 million, while software, technology, and enterprise startups collectively raised $3.3 million, with Markopolo securing $1.5 million.
E-market and retail startups brought in $3.0 million in 2024, with PriyoShop contributing $2.3 million.
In the education sector, startups raised $1.5 million, led by One Minute with $1.0 million.
Healthcare sector secured $1.3 million, and food and agriculture startups raised $1.2 million in total in the year.
"Bangladesh has come a long way in its journey as a tech hub. If government policy support continues and investment culture is nurtured, we will soon see results similar to Indonesia, India, or China," says Waseem Alim, CEO of Chaldal.
The CEO also says: "Our entrepreneurs are scrappy and have the advantage of knowing what has worked in other countries, which is why I expect very high ROI in the coming years,"
The report has, however, highlighted several pressing challenges to startup growth, in a changed situation on the political front. Political transitions, including an interim government and anticipated elections, have made investors cautious due to uncertainty.
"Inflation, currency devaluation, forex reserves depletion, and high interest rates in Bangladesh increase business costs, impact startup valuations, and reduce consumer spending power," the report notes.
Outdated regulations, restrictive tax policies, and limited access to public-procurement opportunities also pose significant barriers to startup scalability and growth.
Furthermore, slowed global venture funding and higher interest rates have caused investors to adopt a more cautious approach, particularly affecting early-stage startups.
The agency suggests promoting domestic investment sources and regional partnerships to provide a buffer against international-market volatility. It advocates for simplifying FDI (foreign direct investment) requirements and tax policies to improve ease of doing business and investor sentiment.
Other recommendations include diversifying funding channels beyond traditional venture capital by leveraging angel investors, government-backed funds, domestic investors, and blended finance instruments.
People familiar with the funding situation told the FE that political movements in July and August impacted fundraising efforts.
However, they hope an investment summit scheduled for April in 2025, which may feature American-billionaire Elon Musk's visit, could attract new funding.
"The July-August political movement affected fund mobilisation due to uncertainty," says Showkat Hossain, CEO of Bangladesh Venture Capital Ltd.
He notes: "Elon Musk, the owner of X Corporation (formerly Twitter), may visit Bangladesh in 2025, potentially contributing to building the country's image."
© 2025 - All Rights with The Financial Express
