Tk100cr startup fund proposed to foster innovation

Business Report :

Finance Adviser Salehuddin Ahmed, in the FY2025-26 budget proposal, announced a Tk 100 crore startup funds aimed at fostering innovation in the information technology sector and encouraging young entrepreneurs. Emphasising the sector’s potential, he noted the importance of supporting emerging talents to venture into the digital economy.
Experts see immense potential for startups in Bangladesh due to a large, youthful workforce. The Bangladesh Investment Summit 2025 further highlighted this promise, showcasing investor interest in sectors like fintech, health tech, and EdTech. While Bangladesh eyes global startup prominence, challenges like fierce global competition, policy inconsistency, infrastructure gaps, and anti-global protectionism pose constraints.
Despite these hurdles, young innovators are driving a slow but hopeful startup revolution, contributing to both self-employment and job creation. However, the country still trails behind leaders like Singapore (50,000+ startups) and India (33,700 startups, 114 unicorns).
Held from 7 April, the four-day Bangladesh Investment Summit 2025 positioned the country as Asia’s next investment frontier. At the ‘Bangladesh Startup Connect 2025’, global investors and policymakers stressed empowering innovation and linking opportunities. The event showcased Bangladesh’s young workforce, strategic location, and improving tech access, underscoring the possibility of double-digit startup growth through an integrated approach.
The Summit proved vital for connecting VCs and startups. Around 25 venture capitalists engaged with startups. Key concerns included regulatory red tape, especially regarding trade licensing and business registration. Simplifying processes and enhancing the business ecosystem were emphasized.
Additionally, Bangladesh Bank announced a nearly Tk 900 crore dedicated fund for startups, built through private commercial banks as equity holders, with a Tk 500 crore co-investment from the central bank. The fund, focused on equity and lending support, could catalyses the next generation of Bangladeshi unicorns. A ‘fund of funds’ (FoF) approach is also being developed to support startups at early and growth stages.
The ICT Division is running 21 projects-three specifically dedicated to startups-and prioritising horizontal startup growth. Stakeholders stressed the importance of data localisation and protection, and the government is working to reduce internet prices. Submarine cable users already benefit from a 10% cut, and bulk users from up to 30%. Over 35% of mobile towers have been fiberised, boosting rural access to the internet.
Pharma giant Incepta launched the Infusion Partners Fund to further fuel startup growth. Untapped potential in tech, consumer goods, and healthcare were noted, though issues like limited VC access and infrastructure remain. To attract investors, startups must show scalability and long-term vision.
Alternative funding-like crowdfunding and strategic partnerships-are emerging as vital channels. EdTech was recognised as transformative for education. Startups like 10 Minute School are bridging educational gaps and creating jobs, calling for more public-private partnerships to scale EdTech solutions.
One session flagged the environmental and economic impact of lead acid battery usage, which costs Bangladesh 6-7% of GDP. There were calls for integrating climate innovation into the economic framework and fostering impact investment with regulatory backing. Exchange restrictions and outdated policies remain major barriers. A regulatory framework for impact investment and stronger public-private collaboration are critical.
The digital healthcare sector valued at $6.75 billion in 2019 and projected to reach $15 billion by 2032, presents significant opportunity. Startups like Arogga, Augmedix, and Praava Health shared efforts to improve diagnostics and healthcare access using AI and digital tools, despite challenges such as poor patient data availability and counterfeit medicine.
Innovative startups showcased products at the summit. FronTech introduced robotics and IoT solutions, while More offered coworking space models. Though venture capital is not new in Bangladesh-EEF was launched in 2000 for IT and agro sectors-results were mixed. The new FoF aims to learn from past missteps by partnering with VC firms to share risk and provide equity support.
PKSF’s support for microentrepreneurs through NGOs offers a successful model of domestic fund disbursement. However, generating funds remains difficult. Equity instruments are limited, and BSEC permissions are cumbersome. VC activity is stagnant, limiting capital availability.
Bangladesh Bank’s Tk 5.0 billion “Startup Fund,” where banks contribute 1% of net profit annually since 2020, has disbursed only Tk 35 crore so far signaling limited uptake. India’s SIDBI offers a model for an effective FoF, with Bengaluru’s Silicon Valley hosting over 4,000 startups, 400 R&D centres, and global tech leaders. Bangladesh can learn from such ecosystems to retain talent and attract investment.
VC firms should actively engage with startups to manage risks and strengthen their growth. With proper policy and funding, young Bangladeshi entrepreneurs can aspire to build companies as iconic as Google or Facebook.
Startups need urgent support to scale up ideas and attract funding. Global investment is welcomed, but repatriation hurdles and exit restrictions persist. Around 90% of international investors prefer registering startups in Singapore due to smoother financial operations.
The ICT Ministry is identifying priority sectors like fintech, enterprise tech, lifestyle, logistics, health tech, agritech, and EdTech. Bangladesh Summit 2025 reinvigorated young entrepreneurs. The momentum must be maintained to build a globally competitive startup ecosystem.