Bangladesh Startup Investment Report 2022: A Year In Review [Readable Version]

LightCastle Analytics Wing
January 23, 2023
Bangladesh Startup Investment Report 2022: A Year In Review [Readable Version]

What You Need To Know About Bangladeshi Startup Investments In 2022

  • USD 439 Bn investments raised by startups around the world: Startups across the globe saw a year-on-year drop of 29% in 2022, due to the recent global economic conditions owed to post-pandemic recovery and the Russia-Ukraine war.
  • USD 109 Mn raised by Bangladeshi startups: Compared to the previous year, 2022 saw a 74% drop in investments, reflected more significantly in the second half of the year.
  • USD 1 Mn average investment size across all quarters: This average excludes the largest-ticket investment of 2022, a USD 63 Mn deal secured by ShopUp from Valar Ventures and Flourish Ventures.
  • 46 deals secured by startups in Bangladesh: Among these, 26 deals were led by investors at home. With the majority of the deals taking place in the early-stage rounds, the ecosystem appears to be still at a maturing stage.
  • 40 unique startups receiving funds this year: Supported in large measure by local investors filling in the gap of reduced global funds, startups raised funding in Financial Services (Embedded Finance/Fintech), logistics and mobility, and education, among other sectors in 2022.

Bangladesh Startup Investment Report 2022: A Year In Review

Download the Full Report

The Global Economy Is Experiencing A Slowdown And Startups Worldwide Can Feel The Subsequent Shift In Funds

The Russia-Ukraine war amid a global economy recovering from the pandemic has resulted in supply-chain issues around the world. These have led to uncertainties rising globally, with climbing inflationary pressures and recessionary phases looming in the majority of economies around the world. 

Economic slowdowns and climbing inflationary pressures are seen around the world, with the South Asian economy experiencing the bulk of the global conditions. Global inflation was predicted to reach 8.9% in 2022, doubling from 4.7% in 2021.

Year-on-Year decrease in funding was projected at 30% for startups around the world, from USD 630 Bn in 2021 to USD 439 Bn forecasted in 2022. Exacerbated by deteriorating economic conditions, investors tightened funding in 2022, especially in the second half of the year.

Graph showing funds raised by startups globally from 2018-2022

Asian Startups Have Seen A Funding Slowdown In 2022 And Bangladesh, At Its Nascent Stage, Has Been Disproportionately Affected

The recent global events have left startups worldwide feeling a gap in funding, with Asian startups, in particular, being impacted strongly. Even in the strongest hubs such as Singapore and China, investments reduced significantly in 2022 compared to 2021. With the Bangladeshi startup ecosystem at a nascent stage, the slowdown in funding was 74%, from USD 415 Mn to USD 109 Mn.

Comparative analysis of startup investment raised per capita by Singapore, China, India, Pakistan, and Bangladesh

Bangladesh Holds Enormous Potential For Startups With A Booming Digitally Savvy Population And Increasing Consumption Patterns

Infographic showing key macroeconomic data of the Bangladesh economy

Bangladesh, Like The Rest Of The World, Saw A Fall In Funds With An Average Of USD 11 Mn Startup Investments In Each Quarter

While the COVID-19 pandemic had strong impacts on startup funding in Bangladesh, dropping 2020’s investment to the lowest in the past 5-year period, the ecosystem at home showed a healthy recovery in 2021 to USD 415 Mn (including the bKash-SoftBank deal of USD 250 Mn)  – an all-time high.

Only a quarter of the previous year’s investments were raised in 2022, at USD 109 Mn, with a 74% year-on-year drop.

Graph showing decline of Bangladesh startup investments in Covid-19 period and subsequent recovery

2022 saw a total investment of USD 109 Mn raised in all quarters. This includes the sizable USD 63 Mn deal by Shopup, Valar Ventures, and Flourish Ventures. Excluding this, the quarters averaged at a ticket size of USD 1 Mn, with the majority of the funds being raised in the first half of 2022.

Average quarterly Bangladesh startup investments raised in 2022

Startups At Home Raised USD 109 Mn In 2022 With Investors At Home Making Up Increasingly Large Portions of Investments

Infographic breakdown of the Bangladesh startup investments raised in 2022

Locally Sourced Investments Grew Accounting For 8% Of All Funds Raised In The Year

58% of the total investments raised came from ShopUp’s USD 63 Mn deal. Excluding this deal, 34% came from foreign sources, and 8% came from local investors. Despite their lower funding volume, local investors made up 55% of all deals in 2022.

Graph showing how Bangladesh startup investments in 2022 mostly came from international sources

Venture Capital made the majority of all investments (79.9%) through 28 deals. Funding USD 14 Mn, Corporate investors raised 12.8% of all funds through 2 deals. Angel Investors made up 11 deals, investing 2% of all funds, while the remaining was funded by Accelerators and Incubators, Impact Investors, and Development Financial Institutions.

Graph showing how Bangladesh startup investments in 2022 mostly came from venture capital

WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a data-driven approach to create opportunities for growth and impact. We consult and collaborate with development partners, the public sector, and private organizations to promote inclusive economic growth that positively changes the lives of people at scale. Being a data-driven and transparent organization, we believe in democratizing knowledge and information among the stakeholders of the economy to drive inclusive growth.

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