Investment in startups needs to be encouraged for economic growth, said experts.
They were speaking at a virtual session titled "Levering Startup Investments for Bangladesh's Economic Growth", organised by LightCastle Partners, Startup Bangladesh Limited, Anchorless Bangladesh, Bangladesh Angels, and BD Startup Founders.
Over the last decade, Bangladeshi startups have raised over $800 million in investments, spearheading the economy and creating 1.5 million direct and indirect employment opportunities while positively impacting the citizens’ day-to-day lives.
According to industry insiders, the Bangladeshi startup industry boasts more than 1200 startups. More than 200 new startups are emerging each year with the booming landscape gaining increasing support from the public and private initiatives with access to funds.
Startups in Bangladesh are gaining increasing global traction, as $412 million out of a total of $415 million investments raised in the past decade came from global sources with Bangladeshi startups raising over $90 million just in the first half of 2022.
Booming digitization catalysed by the Covid-19 pandemic, changing population demographics with increasing consumer demands, as well as increased public and private attention to supporting the startup landscape has cemented Bangladesh’s position as a maturing startup hotspot, even drawing international attention.
However, according to industry insiders, as the startup ecosystem in the country matures, the support for startups needs to evolve to enable Bangladesh’s economic growth further. The impact made by startups makes the sector an economic powerhouse that needs more attention and support.
In that regard, insiders and experts think a strengthened startup policy to facilitate ease of starting and operating startups, with streamlined regulations and requirements, as well as encouraging investments towards startups through better incentives for investors is crucial.
“So, one of our goals is to bring international capital into the market. One of the things we've learned is that for a lot of funds out there - say in Singapore, or Hong Kong or New York - we went to talk to a lot of them and what they want is to feel more comfortable about the market, as most of these companies don't have offices on the ground,” said Rahat Ahmed, the Founding Partner & CEO at Anchorless Bangladesh, an early-stage venture investment fund focused on advancing the local startup ecosystem through access to global resources.
People don't wake up in the morning and say I'm going to invest in a Bangladeshi startup. “They wake up in the morning and say, ‘I want to have the best investment possible,’ and we need to be able to offer them large-scale solutions for alternative investment,” the top brass of the VC explained.
In addition, experts and industry insiders said the startup ecosystem needs to be nurtured through industry-academia collaborations to encourage innovation and talent development at school and university levels as well as continued government support through enabling policies and regulatory frameworks to foster innovations in the country.
Head of Investments Portfolio at Startup Bangladesh Hasan A Arif; Founder and CEO of ShareTrip Sadia Haque and CEO of Bangladesh Angels Nirjhor Rahman spoke as panellists during the session alongside Rahat Ahmed.
During the session, Hasan A Arif of Startup Bangladesh said that the government has already taken several initiatives to increase the flow of investments in the startup sector with the Bangladesh Securities and Exchange Commission (BSEC) already drafting rules that will allow loss-making good startups to be listed on the country’s stock exchanges and offer IPO.
