Bangladesh’s startup ecosystem continues to face significant hurdles as entrepreneurs work to scale their businesses, but recent developments suggest the sector is building resilience despite persistent challenges. Less than 20% of startups survive, less than 5% operate internationally, and a mere $38.2 million in funding was raised in 2022-23. The environment for funding is especially tough for companies that are just starting out. Early-stage funding declined 57% year-on-year to USD 13 Mn, with Seed funding leading the segment at USD 6 Mn. This decline reflects increasing investor scrutiny, with more focus on startups that demonstrate clear pathways to profitability. Despite these obstacles, the overall ecosystem shows encouraging signs of growth. These companies have collectively raised nearly $1 billion in funding, with 76% of that coming from venture capital, according to government officials speaking at recent investment summits. This achievement demonstrates the sector’s potential despite current challenges. Regulatory barriers continue to pose significant obstacles for startup growth. Although challenges remain, such as limited exit options and regulatory hurdles, the government’s strategic initiatives are beginning to address these issues. In Bangladesh, the capital accounts that cannot be converted pose challenges for foreign investors trying to transfer their profits. This situation discourages these investors from investing large amounts of money. The government recognizes these challenges and is taking steps to create a more supportive environment. To address these challenges and foster a thriving startup environment, the government should consider implementing a regulatory sandbox policy, which would allow startups to test innovative solutions within a controlled regulatory framework. Startups are focusing on solving real-world problems across various sectors. Local startups are addressing real-world challenges across sectors such as healthcare, agriculture, education, and logistics, creating value for both local communities and investors. The sector’s future looks promising with targeted support initiatives emerging. Currently, two to three companies are working hard to gather funds. If both local and global political situations shift towards more stability, we could witness some small to medium-sized developments. funds by the end of 2025. As Bangladesh’s startup ecosystem matures, entrepreneurs are developing stronger business models and more sustainable growth strategies. This foundation-building phase, while challenging, positions the sector for more robust growth in the coming years. With continued government support and improving market conditions, Bangladesh’s startup community is well-positioned to overcome current obstacles and achieve sustainable success
