2023 was a good year for Bangladesh's startup scene

Bangladesh's booming startup scene has firmly established itself as a global hub of entrepreneurial dynamism. Photo : Saqlain Rizve

Bangladesh is a young and promising country with a median age of 28. The youth of this country is a critical asset, driving innovation, entrepreneurship, and economic growth. Its rapid economic growth and resilience to global shocks set Bangladesh apart, combined with an expanding middle class and a flourishing digital economy. The surge in mobile subscriptions and internet services has attracted sizable investment. 

According to the LightCastle Partners' Bangladesh Startup Investment Report 2022, published in January 2023, around $803 million flowed into the startup sector over the past 10 years. It is worth mentioning that this estimation excludes the bKash-SoftBank deal of 2018, which alone reportedly brought $1 billion in investment to bKash, a mobile financial services provider. 

These figures include contributions from venture funds, angel investors, and other sources. They also created countless job opportunities and fostered innovation. 

Bangladesh's startup scene is rising, with a growing influx of investments and global recognition. The government's support, the private sector, and promising venture capital firms like South Asia Tech, Bangladesh Angels Network, and Anchorless Bangladesh further fortify this potential. Besides, strategic consulting agencies specialising in startup ecosystem development play a crucial role in nurturing this burgeoning ecosystem.

Bangladesh's booming startup scene has firmly established itself as a global hub of entrepreneurial dynamism. Industry insiders, news reports, and organisations like Startup Dhaka and LightCastle Partners all estimate that the total funding for 2021 ranged from $150 million to $200 million. 

This represents a significant increase compared to previous years. For example, the Bangladesh Startup Ecosystem 2021-22 Report by Startup Bangladesh states that before 2021, the average annual funding for Bangladesh startups was around $44 million.

Key industry players like ShopUp, bKash, and Pathao, as well as the emergence of the country's first-ever unicorn, a mobile financial service provider, played a pivotal role in this economic influx. International heavyweights such as Valar Ventures and SoftBank Group Corporation recognised the immense potential of these startups and infused significant capital into the ecosystem. Moreover, many local and international startup accelerator programs, including Sequoia Capital's Surge Accelerator, are actively fueling the aspirations of Bangladeshi startups.

Bangladesh's startups are emerging as beacons of hope and progress, driven by a young and ambitious population, a thriving tech sector, and government support. From pioneering mobile financial services to revolutionising online grocery delivery and catalysing innovation in agriculture, these startups wield technology as a formidable force for transformation. Furthermore, standout Bangladeshi startups like Shuttle, Fashol, and GIM are examples of the transformative power of innovation, working collectively to build a better Bangladesh for all.

Shuttle provides safe and convenient transportation for women, empowering them to participate in educational and professional activities. In a society where mobility can sometimes challenge women, Shuttle empowers them to overcome these obstacles and contribute to their education and careers. 

Fashol is another pioneering startup that addresses the critical issue of food accessibility and wastage. By connecting farmers directly to consumers, Fashol ensures that fresh, locally sourced produce reaches those who need it. This reduces food wastage and makes nutritious food more accessible to all segments of society. 

GIM, yet another visionary startup, focuses on improving the efficiency and transparency of the trucking industry. By enhancing trucking operations, GIM helps businesses save money, operate more efficiently, and reduce their environmental impact. 

These startups are addressing crucial issues, setting an inspiring example for other entrepreneurs, and demonstrating the transformative impact of technology on society. Bangladesh's startup ecosystem is not just about business but about making a meaningful and lasting difference.

Beyond thriving in the startup arena, Bangladesh invests significantly in mega infrastructure projects. Initiatives such as the Padma Multipurpose Bridge, Dhaka Elevated Expressway, Hazrat Shahjalal International Airport Third Terminal, Dhaka to Chattogram Express Railway, and the Matarbari Deep Sea Port are transforming the country's logistics landscape. These projects enhance the ease and efficiency of moving goods within and out of Bangladesh, ultimately reducing business costs and making the country more appealing to foreign investors.

Furthermore, the government is streamlining customs procedures, improving the road network, and investing in digital technologies to enhance logistics. This concerted effort has catapulted Bangladesh's logistics performance ranking to 88th out of 139 countries in the World Bank's Logistics Performance Index 2023, a significant improvement over the past decade.

As Bangladesh's startups thrive and mega infrastructure projects transform its logistics landscape, a wave of opportunities is emerging for young people. Startups offer internships, training programs, full-time positions, and the chance to become entrepreneurs. Internships and training programs provide valuable work experience and skill development. Venture capital firms invest in early-stage startups, enabling young entrepreneurs to build businesses and contribute to their country's development. These opportunities are not only advancing the careers of young individuals but also bolstering the Bangladesh economy.

The growth of Bangladeshi companies creates wealth, jobs, and opportunities for the country, attracting great leaders from abroad. These leaders are starting businesses, investing in startups, and contributing to the vibrance of Bangladesh's economy. This growth signifies the nation's progress and growing appeal as a place to do business and invest. These leaders' return from abroad brings new ideas, investments, and energy to the country's business ecosystem.

Bangladesh is a nation in motion, leveraging its youthful population, startup ecosystem, and infrastructure projects to drive economic growth and transformation. The country's future holds promise as it pioneers innovation, opens doors for its youth and attracts international recognition and investments. As Bangladesh's star continues to rise, it is clear that this dynamic nation is on an inspiring trajectory towards a prosperous and vibrant future.

Rajesh Radhakrishnan is a managing partner of South Asia Tech.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.