Beyond loans: Building Bangladesh’s venture economy

Why BSIC, why now

Bangladesh today stands at a very important point in its economic journey. Over the last few decades, we have built a strong growth story through manufacturing, exports, remittances, agriculture, infrastructure development and the resilience of our people. But if we want to sustain that momentum and move into the next phase of national development, we must now build new engines of growth. 

The new engines: innovation-led enterprises, scalable SMEs and globally competitive startups.

This is the context in which Bangladesh Startup Investment Company (BSIC) owned by 39 commercial banks was born.

BSIC has been conceived as an independent, professionally governed, bank-backed national investment platform. Its purpose is simple but ambitious: to channel institutional capital from Bangladesh into high-growth businesses and at the same time attract global venture capital into our economy.

Here, the banking community recognised something important. Traditional financing alone cannot support the next generation of entrepreneurs. Grants and subsidy-based approaches may help temporarily, but they do not create a durable investment ecosystem. Bangladesh needs a permanent institution which is commercially disciplined, professionally managed, governance-driven and built to endure across decades.

BSIC, therefore, is not a short-term project. It is not a temporary scheme. It is an institution we hope will continuously compound value for entrepreneurs, investors, banks and ultimately for Bangladesh itself.

What is our investment mandate

BSIC will invest across a broad range of sectors critical to Bangladesh's future. These include technology, healthcare, manufacturing, consumer products, agriculture and agri-business, financial services, logistics, education, sustainability-focused ventures and many other emerging sectors.

We are not approaching venture capital with a narrow technology-only mindset. Bangladesh's development challenge and opportunity are much wider than that. Some of the country's most transformative future businesses may emerge from manufacturing, agriculture, healthcare delivery, logistics or rural commerce.

At the same time, we strongly believe that technology will increasingly become central to competitiveness across all sectors. Whether it is a manufacturing company using automation, a healthcare company using telemedicine or a consumer business driven by data and digital platforms, technology enablement will be a critical lens for BSIC through which we will evaluate startup business proposals. 

There is also an important global precedent behind my thinking. In the United States, the Small Business Investment Company (SBIC) framework played a catalytic role in financing companies such as Apple, FedEx, Costco, and Staples in their early stages. These were not 'technology startups' in the narrow sense. They were ambitious, scalable businesses that used capital intelligently and grew into world-class enterprises.

BSIC aspires to play a similar catalytic role for Bangladesh.

Financing instruments to be used by BSIC

Our investment activity will include direct equity investment into promising companies, co-investment alongside international venture capital firms and also partnerships that help bring foreign investment capital into Bangladesh.

We will build a disciplined investment process beginning from sourcing and evaluation, moving through due diligence and Investment Committee review, and continuing into active portfolio monitoring and support. We will use a range of instruments including equity, SAFEs, convertible structures, and other venture financing tools suited to the needs of growth-stage companies.

The banking partnership: Our structural advantage

One of BSIC's greatest strengths is its deep relationship with Bangladesh's banking sector.

Our shareholder banks are not passive providers of capital. They are strategic ecosystem partners.

No institution in the country has visibility into the business landscape the way banks do. Banks interact daily with businesses across sectors, geographies and economic layers. This gives BSIC a unique advantage in identifying promising enterprises early.

Banks will therefore become a major source of deal flow and business intelligence for BSIC.

Beyond sourcing, banking relationships also strengthen due diligence. Transactional histories, sector understanding, business conduct patterns, governance insights and financial discipline --all these provide important signals that can help improve investment decisions.

This creates a structural advantage that very few venture capital platforms anywhere in the world possess.

For entrepreneurs, this partnership model is also highly valuable. BSIC will not simply provide equity capital and walk away. Through our banking network, portfolio companies will gain access to working capital facilities, trade finance, treasury services, digital banking solutions and broader financial ecosystem support as they scale.

In other words, founders will not just receive capital. They will actually gain access to an integrated financial ecosystem.

This bank-backed structure also sends an important message internationally. When Bangladesh's leading banks stand behind an institution collectively, it creates credibility, permanence and confidence for foreign investors.

Beyond capital: building institutions, not just companies

BSIC strongly believes that capital alone does not create great companies. The real challenge is institution-building.

BSIC therefore intends to work closely with portfolio companies beyond financing. We want to help build governance culture, financial discipline, operational rigour and organisational maturity from an early stage.

This means encouraging proper financial reporting, audit standards, transparency, compliance frameworks and management systems that will prepare these businesses for future scaling, institutional investment or eventual public listing.

We also want our portfolio companies to adopt global best practices in areas such as human resources, technology systems, ESG awareness, supply chain management and strategic planning.

Another important area will be mentorship and knowledge access. We hope to connect founders with experienced entrepreneurs, professionals, diaspora leaders and international advisors who can help them scale faster and think globally.

The best venture capital firms in the world do not merely invest money. They actively help shape companies. BSIC intends to bring that same philosophy to Bangladesh.

The exit agenda: Creating long-term value

Our mission is to help build strong companies. But sustainability of the institution also depends on creating successful exits and generating investment returns.

BSIC therefore intends to remain disciplined and proactive regarding exit pathways.

We will actively cultivate relationships with domestic and international strategic acquirers, large corporates, conglomerates and regional players who may eventually acquire or partner with successful BSIC portfolio companies.

We also hope that some of our portfolio companies will eventually become strong enough for public listing through Bangladesh's capital markets. That would not only create value for investors and founders but also would deepen our equity markets and expand wealth creation opportunities for ordinary Bangladeshi investors.

We also see strong potential in regional partnerships and cross border M&A opportunities across South and Southeast Asia. Bangladesh's future companies should not think only domestically. They should think regionally and globally.

Foreign capital: Positioning Bangladesh globally

Bangladesh remains significantly under-recognised as an investment destination.

BSIC wants to help change that narrative.

We aim to become a trusted local institutional partner for international venture capital firms, impact investors, development finance institutions and strategic foreign investors who are interested in Bangladesh but require reliable local partnership and investment infrastructure.

Here, the banking community recognised something important. Traditional financing alone cannot support the next generation of entrepreneurs. Grants and subsidy-based approaches may help temporarily, but they do not create a durable investment ecosystem. Bangladesh needs a permanent institution which is commercially disciplined, professionally managed, governance-driven and built to endure across decades.

BSIC can help provide local market understanding, due diligence capability, regulatory navigation, governance comfort and ongoing portfolio support that international investors often seek before committing capital.

Our vision is not merely to create another fund. Our vision is to create a credible national platform capable of delivering financial returns while simultaneously strengthening innovation, entrepreneurship and Bangladesh's global investment profile.

By partnering with world-class international investors, we will also bring global standards, networks and perspectives into our ecosystem. This transfer of knowledge and discipline is itself enormously valuable.

The message we want to send internationally is simple:

Bangladesh now has the institutional foundations, entrepreneurial energy and capital formation mechanisms to justify meaningful long-term investment attention.

Ecosystem development and collaboration is the key

No venture capital institution can succeed unless the broader ecosystem around it becomes stronger.

BSIC therefore sees ecosystem development as part of its responsibility.

We want to support mentorship structures that connect young entrepreneurs with experienced operators, investors, professionals and members of the Bangladeshi diaspora.

We also want to collaborate closely with incubators, accelerators, universities and entrepreneurship-focused organisations already working across the country.

Importantly, innovation is not confined to Dhaka alone. Entrepreneurial talent exists in Chittagong, Sylhet, Rajshahi, Khulna, Barishal and many secondary cities and districts. BSIC wants to help decentralise entrepreneurial opportunity and encourage regional innovation ecosystems.

We also recognise that scaling companies require managerial talent. We need good CFOs, operational leaders, technology executives, supply chain specialists and governance experts. Developing this talent base will be critical for the country's future business ecosystem.

Closing: A call to action

BSIC represents a rare generational opportunity.

An opportunity to bring together Bangladesh's institutional capital, entrepreneurial ambition, banking sector strength and global networks into one long-term national platform for economic transformation.

We ask our shareholder banks not only to contribute capital, but to become active champions of this mission.

We ask our regulators and policymakers to remain enabling partners as we build this ecosystem with transparency, accountability, and commercial discipline.

We ask universities, accelerators, entrepreneurs, investors and members of the diaspora to join us in building something larger than any single institution. That is, a sustainable innovation economy for Bangladesh.

The foundation has now been laid. The institution has been formed. The mandate is clear. Now the work begins.

Sketch: TBS

Mashrur Arefin is the Chairman of Bangladesh Startup Investment Company (BSIC) and the Managing Director and CEO of City Bank PLC.

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