Bangladesh Startup Investment Report Q’1 2023: Embracing the Uncertainty

LightCastle Analytics Wing
April 12, 2023
Bangladesh Startup Investment Report Q’1 2023: Embracing the Uncertainty

Global inflationary pressures, macroeconomic disruptions, and increased geoeconomic fragmentation are causing shockwaves for economies across the world. Covid-19 and the Russia-Ukraine war have exposed the fragility of economic interdependence affecting supply chains, commodity markets, and the flow of capital. Furthermore, the failure of three of the biggest banks to tech startups in the U.S., Silvergate Bank, Signature Bank, and Silicon Valley Bank, further cast shadows on global funding to startups.  As a result, global startup funding declined by 50% from USD 63 Bn in January 2022 to USD 31 Bn in January 2023. 

Against this backdrop, Bangladesh has secured USD 35.58 Mn through 17 deals in Q’1 2023, primarily spurred by small ticket funding from local investors. As global investors grow risk-averse and gravitate towards portfolio diversification, opportunities are emerging for Asian startups. This is evident from ShopUp’s recent striking investment raise of USD 30.00 Mn, with the U.K.-based financial institution, Lendable, and the local financial institution, the City Bank.

2023 is predicted to be a turbulent year for the global economy and, consequently, startup ecosystems around the world. What insights are revealed in the funding raised by Bangladeshi startups in the first quarter of the year? What trends can we expect to see this year? What do industry insiders have to say about navigating the funding storm ahead?

Learn more about the Bangladesh startup investment trends in the first quarter of 2023 in the latest report, ‘Bangladesh Startup Investment Report 2023 Q’1: Embracing the Uncertainty’, presented by LightCastle Partners, in collaboration with Startup Bangladesh Limited, Anchorless Bangladesh, Bangladesh Angels Network, and BD Startup Founders. This is part of a series of quarterly publications on the Bangladesh startup ecosystem.

Some of the key findings from this report include:

  • USD 31 Bn was raised by startups around the world in January 2023 – 50% less than the previous year, according to Crunchbase. High inflation and recessionary phases have made investors more risk-averse, as consumer purchasing power shrinks and the cost of borrowing hikes up. Furthermore, Rising interest rates to contain inflation is leading to the readjustment of company valuations.
  • Bangladeshi startups raised a total of USD 35.58 Mn in 2023. The majority of this came from ShopUp receiving USD 30.00 Mn from Lendable and the City Bank. Although the deal count went up in Q’1 to 17 deals, deal volume decreased by 34% from the previous year, and by 55% from the previous quarter (excluding the ShopUp deal in Q’1 2023).
  • Excluding the ShopUp deal, investments from domestic sources made up 73% of the total investment volume. 11 out of 17 deals were led by local investors, and locally raised investments averaged USD 166 K – a staggering 8x increase from the previous quarter.
  • Venture capital firms led 11 out of 17 startup deals, making up 73% of total deals in this quarter. Moreover, 73% of all deals in Q’1 were in the early-stage rounds of startups (grant, pre-seed, and seed stages).
  • Funding funneled to 17 startups from 10 different industries. The top three leading industries were financial services, sports & entertainment, and education. This serves as a testament to the growing technology adoption and sophistication of the local startup ecosystem.
bangladesh startup investment report q1 2023 download button banner If you are interested to learn more about the Startup Ecosystem of Bangladesh Document download full report

About Our Partners:

Startup Bangladesh Limited is the flagship venture capital fund of the ICT Division and the first and only venture capital fund sponsored by the government of the People’s Republic of Bangladesh. 

Anchorless Bangladesh is a New York-based early-stage venture capital fund dedicated to investing in critical businesses that empower Bangladesh’s socioeconomic growth.

Bangladesh Angels Network is the country’s first angel investing platform, founded with a mission to elevate the country’s startup entrepreneurs to the highest level. 

BD Startup Founders Group is the leading startup community of Bangladesh that connects the prominent active startup founders and ecosystem builders in the country.

WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a systemic and data-driven approach to create opportunities for growth and impact. We are an international management consulting firm which creates systemic and data-driven opportunities for growth and impact in emerging markets. By collaborating with development partners and leveraging the power of the private sector, we strive to boost economies, inspire businesses, and change lives at scale.

For further clarifications, contact here: [email protected]

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