A recent analysis shows Bangladesh’s startup ecosystem is in a funding squeeze, and the numbers make the problem clear from the start. Total funding to startups fell to about $41 million in 2024, a sharp drop that left many young companies short of the capital they need to grow. Local participation dropped roughly 95 percent to about $1.1 million in 2024, which means most investment is coming from abroad rather than from local funds and family offices. By mid-2025 local investors had put in only about $625,000, a small sum that shows the slow return of domestic money. While headline funding in the first half of 2025 looked larger, around $119.9 million, much of that came from one big corporate deal, so ordinary early-stage fundraising remains thin. These gaps leave startups dependent on foreign capital and make it hard for new firms to find steady support, but people in the sector say realistic, step-by-step fixes can help. Experts and founders recommend clear, simple changes that target real problems: make it easier for local investors to take patient risks by offering tax breaks or matched funds, develop venture debt and revenue-based financing so founders do not have to chase instant profits, and build angel networks where experienced founders reinvest their gains to back new teams. Practical tools can also lower the barrier for small companies to accept investment and grow sales, such as standard legal and accounting templates, faster ways to register and report, and local pilot programs that let startups test ideas with real customers without large initial costs. Closer ties between startups and established firms can create steady demand and early exits, while incubators and training courses can help founders show clear roadmaps and unit economics to skeptical investors. Many in the field stress that small wins matter: a few reliable exits, even partial ones, would help local investors learn how to back riskier ideas and create a cycle of reinvestment. Policymakers, industry groups and investors can focus on achievable steps: run pilot funds, support mentor networks, reduce red tape for early funding rounds, and offer time-limited incentives that reward long-term commitments. Success will depend on patient effort rather than sudden shifts, and the plan should protect consumers and encourage clean business practices. If local capital returns and simple, proven policies are put in place, Bangladesh’s startups can move from a slow season into steadier growth, creating jobs, offering new services, and helping small businesses modernize. The path back will be gradual, but many founders are ready to try practical ideas that build trust, show results and invite more people to join the startup story. Cooperation, clarity and small targets will guide the recovery forward.
