Bangladesh’s startup ecosystem received a major funding boost yesterday as a Tk 425 crore venture fund backed by Bangladesh Bank and 39 commercial banks was formally launched to support local entrepreneurs struggling with a prolonged shortage of capital.
The Bangladesh Startup Investment Company PLC (BSIC) inaugurated its first fund, titled “Onkur Bangladesh Fund 1”, at an event held at the Radisson Blu Water Garden Hotel in Dhaka.
Guided by the central bank, BSIC will provide equity financing, strategic support and international co-investment opportunities for promising startups, officials said.
Under the structure, participating banks will contribute one percent of their annual net profits to the fund, making it a continuous financing mechanism rather than a one-time initiative. The fund will invest in seed, late-seed and Series-A stage startups.
The initiative follows Bangladesh Bank’s recent policy decision allowing commercial banks to invest one percent of their cumulative net profits from the past five years into the fund and establishing the necessary policy framework for BSIC operations.
Young entrepreneurs in Bangladesh face two key challenges — limited access to funding and lack of collateral. This initiative removes both barriers.
Amir Khosru Mahmud Chowdhury Finance minister
Finance and Planning Minister Amir Khosru Mahmud Chowdhury attended the event as the chief guest, while Bangladesh Bank Governor Md Mostaqur Rahman was present as the special guest.
Since 2010, Bangladesh’s startup ecosystem has attracted over $1.126 billion through more than 460 investment deals, with over $1 billion coming from foreign investors and only around $76 million from local sources, according to LightCastle Partners.
Funding peaked in 2021, when startups raised over $434 million across 94 deals, including bKash’s landmark $250 million investment from SoftBank.
However, funding fell sharply amid global economic uncertainty, inflation, currency depreciation and political instability. By 2024, annual funding dropped to $42 million, while local investor participation plunged 95 percent year-on-year.
Speaking at the event, the finance minister said the financial sector was going through a “painful” period because of past problems in the banking sector and stock market.
“We are working to overcome those challenges,” he said.
The minister said there would be no political interference in the financial sector or related industries.
He said young entrepreneurs in Bangladesh face two key challenges — limited access to funding and lack of collateral.
“This initiative removes both barriers. The investment decision-making process will be transparent, efficient and professional,” he said.
Chowdhury added that the initiative aligns with the government’s political manifesto and its goal of creating employment for one crore people by leveraging the demographic dividend.
“In particular, through the creative economy, both rural and urban youth will be brought into the economic mainstream,” he said.
Amir Khosru Mahmud Chowdhury, minister for finance and planning; Md Mostaqur Rahman, governor of Bangladesh Bank; and Mashrur Arefin, chairman of Bangladesh Startup Investment Company PLC and managing director of City Bank PLC, attend the launch of the “Onkur Bangladesh Fund I” at the Radisson Blu Water Garden Hotel in Dhaka yesterday. Photo: City Bank
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Amir Khosru Mahmud Chowdhury, minister for finance and planning; Md Mostaqur Rahman, governor of Bangladesh Bank; and Mashrur Arefin, chairman of Bangladesh Startup Investment Company PLC and managing director of City Bank PLC, attend the launch of the “Onkur Bangladesh Fund I” at the Radisson Blu Water Garden Hotel in Dhaka yesterday. Photo: City Bank