Introduction
The startup ecosystem has been raised as the next Asian Thriving economy. Bangladesh is getting a top position in maturing startups as it grabbed international attention. The country has attracted a total investment of USD 505Mn in 2021 and 2022. The startup scene has also surged in Bangladesh’s vibrant growth by the COVID-19 pandemic, booming digitalization, and change in population by increasing consumption demands and many other activities.
Startup investment in Bangladesh and Growth
All over the world, startup growth has been gaining global traction. Between 2004 to 2021, the Asian startup growth has diverted venture capital funds away. The U.S has decreased 33%in funds and China has raised USD 37 Bn. Despite the low investments to GDP ratio, Bangladesh grew 10 times in startup investment. In June 2022, 1,100+ Unicorns + (valuation over $1Bn), 50 Decacorns (valuation over $10Bn) and 3 Hectacorns (valuation over $100Bn) with a cumulative value of USD 3.8 Tn. The composition of top performers in the startup ecosystem is slowly moving away from North America to Asia and the Middle East & North Africa (MENA).
Amidst the looming threat of an economic slump, startups may face a reset in capital flows and valuations. Besides Bangladesh, other countries like Singapore, China, India, Vietnam, and Pakistan are also in the top range of growth of startup investment.
In the booming business sector
Bangladesh is one of the fastest growing countries if it comes to the competitive business sector. Within 2021-22, this country reached 8th position with 165 Mn total population. The GDP growth rate has been raised from 416 USD to 1,961 USD. With the ease of doing business and youth digital tech, the savvy population has been raised by 62% and it has been supported by active mobile users, internet users, and MFS accounts.
In the past 50 years, Bangladesh has pulled itself out of its underdeveloped and impoverished status, graduating from its LDC status to become a middle-income economy. The country has made long strides in human development, with one of the highest life expectancy rates in South Asia, a growing urban population, with a remittance flow of USD 21.03Bn in FY 2021-22 compared to USD 24.77 Bn in FY 2020-21. According to Nikkei Covid-19 Recovery Index, Bangladesh ranked 1st in South Asia and 5th out of 121 countries in combating Covid-19 as of May 2022.
The startup ecosystem in digitalization, demographics, and supportive policies
By increasing digitalization, savvy demographic consumption, and private initiatives, the startup investment of Bangladesh has reached these three levers. Digitalization has been raised due to the support of freelancers, Mobile Financial Services(MFS), and the annual growth of the ICT sector. A growing MAC population with digital-savvy has brought an expectation to double 34Mn people by 2026. The policies and private initiatives have been made to encourage various private accelerator programs like Grameenphone, Banglalink IT incubator, and BRAC Urban Innovation.
Multiple incentives are in place to encourage foreign investment and Startup Bangladesh was set up in 2020 as a flagship venture capital fund of the ICT division.
Bangladesh’s Startup Landscape
There are over 1,200 startups in Bangladesh in which the active startups have boasted up to 1200+ with more than 200 new startups. Besides, the booming landscape is gaining support from public and private initiatives within 85% of investment in the last decade. Since 2013, Bangladeshi Startups have raised more than USD 800 Mn with global investors and support from 96% of the raising investments. The Fintech sector has grabbed up to 70% of all investments which has been followed by the E-commerce and Retail Startups.
Startups in Bangladesh are gaining increasing global traction, as USD 412 Mn out of a total of USD 415 Mn investments raised in the past decade came from global sources. The impacts made by startups make this sector an economic powerhouse that needs more support and attention.
Best records of Bangladesh Startup Ecosystem
The best top 6 sectors among the Bangladesh startups have raised more than 692 Mn in the last ten years in the Fintech Sector. From March 2021 to February 2022, the notable Mergers and Acquisitions from the past year are Daraz, Shikho, Chaldal, ZAYAAN, Mainly Coding, HungryNaki, Bangla Meds, and many more. In various sectors, the startup ecosystem has been raised in investment in food delivery, online learning, e-pharmacy startup, coding platform, travel agency, etc.
Social Impacts of Bangladesh Startup Ecosystem
The online money-making policy has been raised by Bangladesh Startups over the past decade. The multifaceted transformations are bKash, ShopUp, PaperFly, Pravaa health, 10 Minute School, Alice, Maya, Sheba, and many more. Among all social impacts, bKash has reached the top position which raised USD 331.00 Mn in FinTech. Besides the platforms including Logistics & Mobility, Healthcare, Education, Food, and Agriculture, Bangladesh’s lives and investments have been raised in the best Startup Ecosystem.
Over the last decade, the Bangladesh startup ecosystem saw a total investment of USD 804 Mn through 232 deals. In 2021 alone, nearly USD 415 Mn was raised in investments, including SoftBank’s capital injection of USD 250 Mn in bKash. Since 2013, almost USD 36 Mn investments have been raised locally across 101 deals, with an average ticket size of USD 354 K in pre-seed, seed, or pre-Series A rounds. Meanwhile, global investors, mainly VCs, invested USD 773 Mn across 132 deals. With a bigger risk appetite, the average ticket size is USD 3.99 Mn (excluding bKash) mostly put in Series A, B, or venture rounds.
Investor trends and Confidence in Bangladeshi Startups
Bangladeshi startups are increasing local and global investors by leading the local investment landscape. ‘Startup Bangladesh Limited’, ‘Anchorless Bangladesh’, and ‘BRIDDHI’ have raised the best portfolios for startup investments including various platforms.
On Angels and Early Stage Platforms
Sectors of Investment 28.3% – Ecommerce & Retail 24.0% – Healthcare 13.1% – Consumer Services Rounds of Investment 71.0% – Seed Rounds 25.9% – Pre-Seed Rounds 3.1% – Series-B+ Rounds Biggest Deals USD 5.00 Mn – Praava Health USD 1.70 Mn – Sheba.xyz USD 1.50 Mn – Pickaboo.
On Corporate Investors
Sectors of Investment 71.5% – Logistics & Mobility 13.0% – Consumer Services 8.1% – Fintech Rounds of Investment 68.0% – Series-A Rounds 20.9% – Seed Rounds 10.1% – Series-C Rounds Biggest Deals USD 23.00 Mn – Pathao USD 11.80 Mn – Paperfly/Ecom Express USD 10.00 Mn – Chaldal/Taavet Hinrikus.
In International Accelerators & Incubators
Sectors of Investment 40.7% – Ecommerce & Retail 29.9% – Fintech 20.4% – Education Rounds of Investment 94.7% – Seed Rounds 5.3% – Pre-Seed Rounds Biggest Deals USD 2.50 Mn – Shajgoj/Surge USD 2.50 Mn – ShopUp/Surge USD 2.00 Mn – 10 Minute School/Surg.
In Venture Funds
Sectors of Investment 84.5% – Fintech 4.4% – Ecommerce & Retail 3.9% – Logistics & Mobility Rounds of Investment 42.5% – Series-B+ Rounds 37.7% – Venture Rounds 11.0% – Series-A Rounds Biggest Deals USD 250.00 Mn – bKash/SoftBank USD 75.00 Mn – ShopUp/Valar Ventures USD 5.60 Mn – Praava Health/SBK Tech Ventures.
Growth of Bangladesh Startup Ecosystem
01 |Factors Fuelling the Growth of the Bangladesh Startup Ecosystem Government Commitment to Entrepreneurship, Digitization, and Public and Private Support 02 | Bangladesh’s Startup Ecosystem Is Heating Up, but Still Facing Challenges Limitations in Policies, Access to Skills Development, and Financial Markets 03 | Recommendations to Propel the Startup Ecosystem Forward: Boosted Promotion of Startups, Supportive Policies for Investment, and Stronger Capacity Building.
Bangladesh Startup Ecosystem
Investors from various vibrant investor groups are pushing the startup ecosystem forward. Various ecosystem investors like Ecom express, DEKKO ISHO, IFC, and BRIDDHI have been raised in various local and global sources. Over the past decade, angel investors have invested an average of USD 292k in over 88 deals. The corporate investors have invested over USD 3.50 Mn across 28 deals. Investments from accelerators and incubators have been raised up to USD 500k with 20 deals.
In partnership with promoting International Investments in Bangladesh
In Bangladesh’s startup ecosystem, the partnership has been done within facilities with an inflow of foreign investments. Some respective key partners are Startup Bangladesh Limited, BD Startup Founders, Anchorless Bangladesh, and Bangladesh Angels. The ‘LIght-Castle Partners’ are the data-driven approach investments in Bangladesh which make a huge collaboration and consult with development partners, private sectors, and various organizations.
