In the wake of recent political upheaval and a mass uprising that led to the ousting of the government and former Prime Minister Sheikh Hasina fleeing to India, a wave of corruption and favouritism allegations has emerged.
The startup ecosystem has not been spared. Many government officials, including members of parliament and ministers, have been arrested or detained, and troubling reports have surfaced about businesses and startups being denied investments and even bank loans for political reasons.
One example of it is EdTech startup Shikho, last Wednesday, Shahir Chowdhury, founder and CEO of Shikho, in a Facebook post titled "Call for a Fair Environment for Everyone in Bangladesh’s Startup Ecosystem," said that Startup Bangladesh Limited (SBL), a government-backed initiative under the ICT Division, abruptly withdrew a proposed five crore taka investment in his company. The decision, according to Shahir, was driven by political motivations, leaving him both shocked and frustrated.
Shahir explained that after months of meetings and thorough due diligence in 2023, SBL, alongside Sturgeon Capital and Sajida Foundation, had appeared ready to invest in Shikho.
Out of SBL’s $1.5 million investment fund, Tk5 crore had been allocated to the education-focused startup. However, just as the agreement was about to be signed, SBL unexpectedly pulled out.
Shahir was discreetly informed that the decision was linked to political issues, even though neither he nor his team were involved in any such matters.
He noted that Startup Bangladesh has a policy allowing them to withdraw funding at any time without explanation.
While the five crore taka wasn’t critical for Shikho’s survival, according to Shahir, the consequences of SBL's withdrawal were far-reaching.
Shahir discovered that his company had been blacklisted by the government, excluding them from opportunities in the rapidly growing education sector. He also observed other companies in the education field receiving preferential treatment, highlighting the perceived unfairness in the system.
Similarly, Rijve Arefin, co-founder of Awareness 360 and a Forbes 30 under 30 honoree, also spoke up about the discrimination against him. Speaking to Dhaka Tribune, Rijve said: “We have tirelessly worked to empower young people globally, positively impacting over three million lives through our projects. Yet, despite our global success, we’ve faced significant hurdles in Bangladesh.”
Rijve highlighted the difficulties his organization faced in securing NGO registration, obtaining funding, and gaining institutional support in the country. "The previous government did not support us simply because we lacked political connections," he said.
He also further described a system rife with favouritism and corruption, where organizations with questionable credibility received the majority of government funding while deserving organizations like Awareness 360 were sidelined.
Even after gaining global recognition, government departments showed little interest in their cause. Efforts to obtain NGO registration were met with demands for exorbitant bribes, further obstructing their operations.
“We are advocating for a transparent, merit-based system. Government funds should be allocated based on an organization's track record and impact, not political alignment,” Rijve stressed. "By doing this, we can ensure that deserving organizations have an equal opportunity to thrive and contribute to the nation’s development."
The founders along with many others have raised their voices and called on the interim government to reassess how startups are treated, expressing their belief in education and in the development space as forces for positive changes in Bangladesh.
Despite the challenges, they along with most in the startup community remain hopeful that with a new ICT advisor in place, the current startup ecosystem will be re-evaluated.
This however is not the first time Startup Bangladesh Limited has been involved in a similar controversy. During the student quota reform movement, SBL also abruptly withdrew a five crore taka investment in Ten Minute School, shortly after its co-founder, Ayman Sadiq, expressed support for protesting students, suggesting significant manipulation of providing funds only when it aligns with the government’s narratives.
The experiences of startups like Shikho and Awareness 360 highlight the urgent need for systemic change to foster a fair and equitable environment for startups and organizations in Bangladesh, free from political interference.