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I have followed the startup landscape for almost a decade now from the early start in 2013 to growing steam from ride-sharing companies like Pathao to big strides in Fintech from bkash and more recently from ShopUp in embedded finance and logistics. Over the years I have seen the founders are getting sharper, the ideas more grounded, and growing ambition. But the financing ecosystem supporting them has not kept up. We are still relying on structures designed for traditional SMEs, not high-growth companies that need risk capital, flexible exits, and investors who understand long tail investing. While there has been success cases like setting up of the sovereign venture capital (VC) – Startup Bangladesh Ltd and more recently the central bank planning to back a bank led VC we need more private sector participation.
If we want the next decade of Bangladeshi innovation to be different from the last, we need to upgrade the system that surrounds our founders. Three policy moves—tested elsewhere and very doable here—can shift things in a meaningful way.
1. Make early-stage investment less painful
Early money is scarce here. Angels hesitate, institutions arrive too late, and even when people want to invest, the tax treatment isn’t friendly. Countries that cracked this problem started by making it easier—financially and mentally—for people to take risks. The UK’s EIS/SEIS programs are the classic example: they offer income tax relief, capital gains exemptions, and even loss protection. France has a similar approach for innovative SMEs. India simplified the angel tax issue and created clearer rules for Category-I alternative investment funds.
Bangladesh can introduce something similar without overcomplicating it:
We do not need to subsidize risk; we just need to make the courage feel rational.
2. Back VC funds through a proper Fund of Funds
Every strong startup ecosystem has a public anchor that helps build the underlying venture capital industry. Not to pick winners, but to strengthen the pipes. India did it with SIDBI’s Fund of Funds. Singapore did it with ESVF and SEEDS Capital. Europe did it through the EIF. The playbook is simple: government puts in part of the capital (20–40%) into licensed VC funds, and private investors join because the signal is strong and the structure feels safer.
In Bangladesh’s context, a catalytic Fund of Funds could prioritize themes we care about—climate tech, agri-value chains, digital inclusion—while helping local fund managers grow with discipline.This is one of the most effective ways to get more high-quality capital flowing into early and growth-stage ventures. Additionally this would also encourage global fund managers take a stronger look given matching funds can de-risk their investments.
3. Fix repatriation, exits, and capital market pathways
Foreign investors consistently tell us the same thing: “We like the market, but we do not like the uncertainty.” Bringing money in is manageable; taking money out is too often a headache. Add unclear rules on secondary share sales, buybacks, or foreign-currency M&A, and the ecosystem starts to feel restrictive. A modern startup economy needs predictable FX guidelines, time-bound repatriation processes, and clean mechanisms for equity exits. Without that, even great startups will struggle to attract serious foreign participation.
On top of that, Bangladesh needs an active Startup/SME board at the stock exchange. India has it. The UK has AIM. Japan has Mothers (now Growth Market). Additionally, rule changes allowing Startups who have reached a certain stage to list in the main bourse is also helpful. These platforms let high-growth companies list earlier under reasonable disclosure requirements, while still maintaining governance. Liquidity and exit options are part of the ecosystem. Without them, everything else stays small.
A coordinated financing stack, not scattered incentives
Bangladesh doesn’t need a long wish list or a shiny policy document. We need a coordinated financing stack that sends one clear signal: If you build here, we will back you. If you invest here, we won’t trap your capital. And if you succeed here, there’s a path to scale.
That means:
Our founders have already shown they can compete with the best. Now the system needs to catch up.
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