Hot spots for startup growth have spread beyond Silicon Valley, from China to India:
While the last decade has been favorable for startups amidst a bull run and record highs, the current crippling implications of the pandemic and market slowdown might bring this run to a halt. Amidst the looming threat of an economic slump, startups may face a reset in capital flows and valuations.
Compared to its peers, Bangladesh’s startup investment is still a relatively smaller portion of its GDP, at only 0.10 percent of the current GDP. Despite this, between 2020 and 2021, Bangladesh experienced the largest increase in startup investments among comparable countries, with a nearly ten-fold increase.
Despite the COVID-19 pandemic, Bangladesh has been able to sustain a GDP growth rate of around 6.80 percent in 2021. The country has had strong vitals in exports, with a total export of USD 52 Bn and a USD 2.90 Bn FDI Inflow in 2021, indicating a strong competitive business sector, With more than half of its population under the age of 35 and growing numbers of mobile and internet connections across the country, a digitally-savvy population heads the future of Bangladesh.
Doing business in Bangladesh remains challenging for a number of reasons. Lengthy bureaucratic processes, limited access to finance and markets, as well as weak infrastructure, hinder entrepreneurship in the country. However, the country has also seen an immense amount of progress in these areas:
In the past 50 years, Bangladesh has pulled itself out of its underdeveloped and impoverished status, graduating from its LDC status to become a middle-income economy.
As the Bangladeshi population moves towards increased adoption of digitalization and new technologies and a growing MAC population, paired with a younger digitally-savvy population, drives consumption, Bangladesh is at an ideal point for startups to seize opportunities. This is supported by encouraging policies incentivizing foreign investments and facilitating the startup ecosystem.
Since the conception of the startup ecosystem in Bangladesh in 2014, the country has come a long way in developing its startups. Almost a decade later, the country boasts its first unicorn, bKash, with increasing numbers of startup enablers in the ecosystem, including Startup Bangladesh Limited, the flagship venture capital sponsored by the Government of Bangladesh.
Between various types of investors, development partners, accelerators and incubators, private sector partners, academic institutions, competitions, and government support initiatives, Bangladeshi startups now have a robust range of supportive enablers in the ecosystem.
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