Start-ups in Bangladesh still struggling to begin their big journey

FE Team | Published: June 27, 2025 22:11:08 | Updated: June 27, 2025 22:12:45

Despite years of enthusiasm, increasing digital penetration, and a growing pool of young talent, Bangladesh's start-up ecosystem is yet to take off in a way that matches its potential, reports UNB.
Entrepreneurs continue to face major hurdles in their journey from idea to scale, raising concerns about the long-term viability of the sector.
In recent years, Bangladesh has witnessed a flurry of activity in the start-up space, especially in fintech, e-commerce, logistics, edtech and healthtech.
Yet, most of these ventures remain stuck in early stages, struggling to scale due to funding gaps, bureaucratic hurdles, lack of infrastructure and a risk-averse investment climate.
"There's no shortage of ideas or energy," says Sharmin Jahan, co-founder of an early-stage healthtech platform. "But after the first round of funding - mostly from friends or small grants - it's extremely hard to raise institutional investment. The ecosystem is not yet mature."
Data from the Bangladesh Start-up Investment Report 2024 shows that while over 1,200 startups have launched in the last decade, only a handful have managed to raise more than $5 million.
Most operate within a fragile framework, surviving month-to-month and struggling to retain talent.
Investors cite a lack of market data, inconsistent regulatory frameworks and limited exit options as key reasons for their caution.
"We need more policy stability and stronger startup-friendly reforms," says Syed Hamidul Islam, a local venture capitalist.
"It's not just about tax breaks - we need easier registration, foreign investment facilitation and better legal protections," he added.
Start-ups also point to a lack of coordinated support. Many rely on accelerator programmes and hackathons for visibility, but complain these often fail to provide long-term mentorship or market access.
While government-backed initiatives like Start-up Bangladesh have provided some capital, critics say the overall pace and scale remain insufficient.
Another major bottleneck is infrastructure. Poor internet reliability outside major cities, digital payment adoption challenges and the absence of reliable logistics make it difficult for start-ups to operate effectively at a national level.
The talent pool, though promising, also suffers from a mismatch. Founders say that while many young professionals are eager, they often lack experience or require significant upskilling to meet startup demands, a task not all founders are equipped to manage.
Even then, some remain optimistic. "The ecosystem is still in its adolescence," says Rubaiyat Tanveer, an ecosystem analyst.
"What we need now is a unified push - from government, private sector, and academia - to create the kind of enabling environment seen in India or Indonesia," he said.
Without significant policy interventions and ecosystem support, Bangladesh's startup dream risks remaining just that a dream. For now, the promise is there, but the path to real impact and scale remains fraught with challenges.
Foreign Funding Dependence
Bangladesh's start-up ecosystem has seen explosive growth over the past decade, expanding from a handful of tech ventures in the early 2010s to more than 2,500 active startups by 2025.
Yet despite this expansion, industry insiders say the sector is still struggling to begin its "big journey" - hampered by overdependence on foreign funding, limited domestic investment, and an underdeveloped support infrastructure.
According to the Bangladesh Start-up Investment Report, total funding raised by startups since 2013 stands at approximately US Dollar 989 million across more than 400 deals.
A staggering 92% of this capital has come from international investors, leaving the ecosystem highly vulnerable to global economic fluctuations and regional competition.
"Bangladeshi start-ups have the ideas, energy, and market potential," said Tanjila Rahman, ecosystem lead at a local accelerator.
"But when international funds slow down - like we've seen since 2022 - start-ups can't survive because the domestic funding pipeline just isn't strong enough yet," she said.