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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.

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 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 Startup Bangladesh Limited have provided some capital, critics said that the overall pace and scale remained 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 said that that while many young professionals were eager, they often lacked experience or required significant upskilling to meet startup demands, a task not all founders were 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.

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 $989 million across more than 400 deals.

A staggering 92 per cent 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.

After peaking at $435 million in 2021, investment into Bangladeshi start-ups plummeted to $72 million in 2023 and only $44.5 million was raised in the first half of 2024

This downturn has forced many early-stage startups to cut operations, delay launches, or shut down entirely.

Beyond funding, start-ups face other systemic challenges: slow regulatory procedures, lack of access to cross-border payments, digital infrastructure gaps, and a talent pipeline that remains largely unskilled for advanced tech roles.

Many founders also complained about the bureaucratic complexities involved in forming and registering a business or receiving foreign remittances through legal channels.

‘There is a digital Bangladesh vision, but our policy instruments are still analogue,’ said Asif Mahmud, co-founder of a Dhaka-based start-up.

‘It takes months to process a basic legal compliance document or approve a foreign equity transaction,’ he said.

Though government-backed initiatives like Startup Bangladesh and the iDEA Project under the ICT Division have provided seed funding and grants to select start-ups, industry players say these efforts remain isolated and need to be part of a broader, coordinated national policy.

Despite these obstacles, Bangladesh’s startup ecosystem has created an estimated 1.5 million direct and indirect jobs and has improved access to services in sectors like fintech, healthcare, agriculture, logistics and e-commerce.

Flagship companies like bKash, Bangladesh’s only unicorn, demonstrate the potential for global-scale success, but remain the exception, not the rule.

‘bKash was built over years of patient capital, strong governance and international support,’ said Farid Islam, a venture adviser.

‘We need that same patience and structure across the board, with local investors stepping in to carry forward the next generation of ventures,’ he said.

Startup Bangladesh has committed TK 500 crore in funding to develop the next wave of scalable ventures.

Meanwhile, the government has signalled interest in formulating a National Start-up Policy aiming to foster at least five unicorns by the end of the decade.

But without urgent reforms, including smoother registration processes, stronger intellectual property protections, digital infrastructure expansion, and better access to both domestic and global capital, Bangladesh’s start-up sector risks losing its momentum.

‘The ecosystem is standing on the runway,’ said Tanveer Shams, founder of a local logistics start-up. ‘But without a solid push from within the country, we may never take off.’ 

When ShopUp launched in 2016, it identified a specific niche: helping small businesses selling through Facebook — known as f-commerce entrepreneurs — overcome fundamental operational challenges.

On April 9, ShopUp announced a strategic merger with Sary, a Gulf-region B2B marketplace. This union created SILQ Group, a cross-regional B2B commerce platform targeting markets across the Gulf and emerging Asia.

The merger came with substantial financial backing of $110 million in funding led by Sanabil Investments, a wholly owned subsidiary of Saudi Arabia’s $925 billion public investment fund, and Peter Thiel’s Valar Ventures.

Chief of staff of ShopUp and director of Oleyn.ai Md Ziaul Haque Bhuiyan told UNB that Bangladeshi startups were showing strong potential, but to attract more foreign investment, they needed better governance, clearer financials and most importantly, scalable business models.

‘The ecosystem is just getting ready, but it requires sharper positioning and stronger institutional and policy support. Local banks and NBFIs must step up with startup-friendly products, while Bangladesh Bank should facilitate smoother cross-border investment flows,’ he added.