GET IN TOUCH

Bijon Islam at the Road to Smart Bangladesh Show: Insights into the Startup Ecosystem and Future Prospects

Profile
LightCastle Editorial Wing
June 23, 2024
Bijon Islam at the Road to Smart Bangladesh Show: Insights into the Startup Ecosystem and Future Prospects

Bijon Islam, Co-founder and CEO of LightCastle Partners, recently appeared on the Road to Smart Bangladesh show, organized by News24. During the show, he discussed the current startup ecosystem in Bangladesh and also shared insights on LightCastle’s journey and its efforts to drive inclusive growth and innovation towards shaping Bangladesh’s economic landscape.

Bijon Islam, Co-founder and CEO of LightCastle Partners, recently appeared on the Road to Smart Bangladesh show

Key Highlights from the Road to Smart Bangladesh show

“Bangladesh is now a factor-driven economy, but with the upcoming LDC graduation, we need to transform it into an innovation-driven economy.”

-Bijon Islam

Startup Ecosystem of Bangladesh: Embracing Growth Amidst Challenges

In the last decade, Bangladesh’s startup sector has attracted nearly $1 billion in investment. However, compared to neighboring economies, it is estimated that the sector needs around $2.5 billion in annual investment to unlock its full potential and drive innovation, especially in light of challenges like LDC graduation.

Bijon Islam stated that startups inherently carry a high risk of failure due to their objective of introducing new solutions to the market. For example, Pathao or 10 Minute School were a novel and risky venture when it first launched. However, embracing this risk is essential to fostering innovation, which can be achieved through various forms of risk capital, such as angel investments, venture capital, and private equity. 

However, despite the traditionally conservative investment landscape in Bangladesh, we have witnessed a growing trend of local investments in startups. Although this growth has not been entirely smooth, it has been steady, indicating overall a positive trajectory for the future of the startup ecosystem.

Government Initiatives: A Pillar of the Startup Ecosystem

Bijon Islam highlighted some of the impactful initiatives taken by the government over the years to foster a solid foundation for the sector, such as Startup Bangladesh Limited, (a sovereign venture capital fund) that has invested in over 30 thriving startups worth over  $65 Million and provides seed-level grants as well. 

Additionally, SBL organizes an annual nationwide startup summit where local and foreign investors converge with emerging startups, fostering collaboration and investment opportunities.

The ICT division under the Ministry of Post, Telecommunication, and Information Technology of Bangladesh has taken an active role in shaping the startup landscape. Collaborating with policymakers, innovators, and investors, they aim to develop a system that strengthens legal regulations for startup owners and investors alike. 

They are currently at the stage of curating the startup policy, with the objective of creating a comprehensive guideline to navigate the system seamlessly. This initiative seeks to establish a smart and well-managed financial and legal infrastructure within the sector, ensuring its growth and sustainability.

These efforts need to be more consistent to establish a strong partnership between the public and private sectors, akin to neighboring economies. For instance, investors who are contributing to the startup ecosystem should be further incentivized with measures like tax breaks and streamlined regulations, as well as facilitation of repatriation, to hold this momentum and strengthen this sector.

Thinking Outside the Investment Box: Beyond Traditional Avenues

Bijon Islam emphasized the shift towards non-traditional investment approaches by highlighting that local conglomerates like BSRM and Square are investing in innovative local startups like Chaldal and Sheba.xyz. 

Financial institutions like IDLC have also launched a venture capital wing to promote corporate venture capital. Recently, the central bank of Bangladesh outlined crucial financial terms for such investments, recognizing the contributions of startups to the system.

This indicates a positive trend of increasing local investor participation in the startup ecosystem, which is a necessary step to drive growth and develop future-ready solutions across diverse sectors. 

The Impact of Forex Reserves on Investment Infrastructure in Bangladesh

The forex reserve poses a dual challenge, with restrictions and negative balances impacting businesses in import-heavy Bangladesh. However, complete openness can lead to financial fraud, harming forex growth. Striking a balance here is essential. 

Bijon Islam highlighted the challenges within the IT sector, which is experiencing rapid growth and emerging as a South Asian hub. Tech startups are attracting substantial investments and exporting IT products and freelancers worldwide. 

However, amidst financial crises, navigating becomes increasingly complex. He emphasized that a balance must be struck between flexibility and regulation to ease export stress. He suggested that the government should collaborate with industry pioneers, ecosystem actors, and policymakers to understand the sector’s pain points and implement measures to facilitate smoother financial transactions.

In conclusion, to achieve the vision of a “Smart Bangladesh” by 2041, accelerating our growth pace is essential. Key sectors like agriculture, RMG, healthcare, and education must embrace innovation and technology to drive progress. 

By fostering localized innovation and promoting local innovators, we can strengthen the pillars of a Smart Bangladesh ensuring sustainable and inclusive growth.

Watch the Full Episode of the Show


Profile
WRITTEN BY: LightCastle Editorial Wing

For further clarifications, contact here: [email protected]

Want to collaborate with us?

Our experts can help you solve your unique challenges