Bangladesh is currently focusing on the start-up ecosystem as the Government, investors and trade organisations are joining hands to push the start-up culture. The country currently has 2,500+ active start-ups with an additional 200 being launched each year. Moreover, it has set its sights on nurturing five unicorns by 2025 (currently two unicorns exist). With favourable conditions, Bangladeshi start-ups have the potential to raise over US $ 2.5 billion per year by 2030 and produce 50 unicorns by 2041, the year the country turns 70. But compared to countries like Singapore, China and India, its start-up funding per capita in 2022 was only US $ 0.73, significantly lower than US $ 1,206.31 of Singapore and India’s US $ 14.82. As the country’ economy is growing, so are its overall challenges. However, it will be interesting to see how the start-up revolution takes shape in future.
Figures Speak
Last decade has remained very crucial for the country’s start-ups. Between 2013 and 2023, in 377 deals, the total funding raised by the Bangladeshi start-ups stood at US $ 909 million. But an interesting aspect is that 66 per cent of these were raised within the past four years. 93 per cent of the funding came from global sources. But, except for a few noticeable foreign investments like Softbank’s US $ 250 million in Bkash (a mobile financial service), Bangladeshi start-ups received a few small ticket early-stage investments. Various reports indicate that foreign investors are hesitant to engage within the Bangladeshi jurisdiction due to concerns like entry and exit barriers.
However, because of the growth of start-ups, the country is witnessing increased employment as well as economic prosperity. So far, more than 1.5 million jobs have been created and almost 7,50,000 SMEs have received support.
Incentives for foreign investments in start-ups
● Tax exemption for up to 15 years for foreign investors ● No import duties for export-oriented sectors ● Retained earnings treated as new investments ● Foreign ownership companies can secure working capital/long- term financing from local financial institutions |
Factors contributing to growth
Mobile internet is one of the factors driving tech-based start-ups. Out of a total population of 171 million people, there are 126 million mobile internet subscribers, and the country’s internet penetration stands at 75 per cent. These factors point to its readiness for more digital innovation.
According to the Bangladesh Bank, there were 201 million mobile accounts registered for Mobile Finance Services (MFS) by 2022 and transactions worth US $ 101 billion were done through MFS/e-money.
The government is also actively fostering a vibrant start-up ecosystem through a range of initiatives and upcoming projects. Initiatives like the Innovation Design and Entrepreneurship Academy (iDEA) project and Startup Bangladesh Limited are offering training, mentorship and financial assistance to aspiring entrepreneurs and the notable ones. iDEA has mobilised US $ 2.57 million in grants for 385 start-ups through the Bangabandhu Innovation Grant (BIG) and other programmes like iDEAThon, Student 2 Startup and Startup Compass. Similarly, Startup Bangladesh Limited, the flagship venture capital company of the Information and Communication Technology (ICT) Division of Bangladesh Government, has allocated capital of US $ 65 million for start-ups.
With a population of around 170 million and a steady rise in purchasing power, it will not be wrong to say that Bangladesh is a lucrative market for start-up investment, as start-ups, with the help of technology, can scale up their businesses at an unmatched speed. |
The government is also working on setting up a fund to enhance access to capital for start-ups and for the implementation of the Startup National Policy aimed at streamlining business and investment processes. Recently, ‘India-Bangladesh Startup Bridge’ portal was launched with the aim for skill development, exchange of knowledge, ideas and experiences and mutual information between start-ups of the two countries.
Focused Areas
Indicating rising demand for innovative financial solutions in the country, embedded finance and fintech have received more than US $ 615 million in funding since 2010. E-commerce and retail segment, with 70 start-ups, received a funding of around US $ 78 million. What is notable is the number of start-ups related to the RMG industry. Bangladesh Angels Network invested US $ 1 million in the seed round of Reverse Resources, a SaaS platform that maps, matches and traces waste from textile factories, then helps fashion companies recycle them to achieve full circularity.
Online clothing retail store Aadi received a funding of US $ 1.4 million. It enables non-residential Bangladeshis to make local purchases. The list includes Ajkerdeal, a well-known online retail marketplace, offering a diverse range of apparel products; online B2B marketplace platform Merchant Bay, offering fashion products, with around 1,000 suppliers; and end-to-end supply chain platform Nitex, catering to SME apparel brands and individual entrepreneurs, starting from product design to order fulfilment, all the way through to shipping the products to the warehouses. Then there are start-ups like Chaldal and Shajgoj. The former’s core focus is e-commerce, while the latter deals in fashion products, including clothing and lingerie.
Two Unicorns of Bangladesh
bKash (a financial services company) founded by Kamal Quadir Nagad – mobile financial service provider |
It is worth mentioning that e-commerce accounts for 0.3 per cent of Bangladesh’s retail now and will have a 5 per cent share of the trillion-dollar Bangladesh economy a decade from now, a US $ 50 billion opportunity for the sector.
With a population of around 170 million and a steady rise in purchasing power, it will not be wrong to say that Bangladesh is a lucrative market for start-up investment, as start-ups, with the help of technology, can scale up their business at an unmatched speed.
But for this, more support is required, especially at funding levels. Waseem Alim, Co-founder and CEO of the pioneering online grocery platform Chaldal.com, says that a Taka 10,000 crore fund, strategically directed towards start-ups, can be the spark to propel Bangladesh to become ‘Smart Bangladesh’.
Mumit Hasan, Director, Business and Operations, Bangladesh, Reverse Resources shares his experience on overall start-up scenario, “Bangladesh’s start-up ecosystem has experienced significant growth driven by improved technology access, a burgeoning youth population with entrepreneurial aspirations, supportive government policies and a growing venture capital ecosystem,” further adding, “however, market fragmentation, regulatory complexity, funding constraints and infrastructure deficiencies are inhibiting the growth of start-ups in Bangladesh.”

As per Mumit, “To propel start-ups for more growth, it is essential to facilitate capital access via venture capital, angel investors and government funding. Fostering innovation-friendly regulations with incentives and tax benefits, cultivating skilled workforce through educational programmes and enhancing digital infrastructure for tech start-ups are required. There is also need to expand incubators and accelerators for start-up support. Simplify regulatory processes, streamline business registration procedures and create a conducive regulatory environment for the start-up culture to thrive.”

Few of the start-ups (which have received seed funding)
Priyo Shop | Shajgoj |
Chaldal | Pickaboo |
MyAlice | Sheba.xyz |
Sindabad | ShopUp |
“The main issue with start-ups in Bangladesh is to ensure funding from investors, so many start-ups are forced to raise funds from family and friends. Secondly, our Bangladeshi start-up culture is not fully mature, so if a start-up gets funding from investors, he or she has to face market and governance issues. But one has to keep patience as the market is big and full of potential too. We took an early mover advantage and focused on developing the market for our products. So we are growing and adding new stores too (of Being Human brand). A start-up has to plan ahead of time and focus on budget specifically. Regarding the Government’s initiatives, I feel that the need is to focus more on creating an ecosystem for start-up culture with special focus on financial inclusion. We are dependent mainly on private investors,” stated Mohaimin Mostafa , Co-Founder , Crimson Cup Coffee & Tea, Bangladesh, Being Human Bangladesh, Kotha ( social media app).