Bangladesh's hi-tech industry is growing due to several factors: a young and tech-savvy population, growing middle class, widespread mobile and internet connectivity, and government initiatives to develop infrastructure and train professionals. Major challenges include a lack of skilled workers, low productivity compared to countries like China and India, and a reliance on foreign talent for middle management. Building strategic partnerships and promoting a "Digital Bangladesh" brand could help attract more local and global demand for Bangladesh's hi-tech sector.
Bangladesh’s Startup Ecosystem has experienced incredible growth since its journey began in the early 2010s. The ecosystem is now coming of age, riding on - USD 200 million in investments, government initiatives, global & local accelerator programs propelling 1,000+ active Startups, who have created 1.5 million+ employment in Bangladesh with products and services which are increasingly becoming part of the country’s everyday life.
Check out the latest update on the Bangladesh Startup Ecosystem.
The COVID-19 pandemic has affected all spheres of life and business but one of the hardest hit are the already vulnerable SMEs due to dependence on a short cash cycle, supply chain disruption, and loss of sales. To understand the current impact of the crisis on SMEs in detail, LightCastle Partners & Sheba.xyz collaborated on an independent study about the “COVID-19 Impact on the SMEs of Bangladesh".
LightCastle Partners’ annual flagship publication titled ‘The LightCastle Business Confidence Index 2019-20’ gauges the business sentiments of private sector leaders across several sectors, that have a notable contribution to the country’s economy. The industries to feature in this study were purposefully determined to include sectors that had the highest level of contribution to the country’s GDP.
Bangladesh Startup Ecosystem - The Untapped Digital Goldmine of AsiaLightCastle Partners
Bangladesh’s Startup Ecosystem has experienced incredible growth since its journey began in the early 2010s. The ecosystem is now coming of age, riding on - USD 200 million in investments, government initiatives, global & local accelerator programs propelling 1,000+ active Startups, who have created 1.5 million+ employment in Bangladesh with products and services which are increasingly becoming part of the country’s everyday life.
Bangladesh’s Startup Ecosystem has experienced incredible growth since its journey began in the early 2010s. The ecosystem is now coming of age, riding on - USD 200 million in investments, government initiatives, global & local accelerator programs propelling 1,000+ active Startups, who have created 1.5 million+ employment in Bangladesh with products and services which are increasingly becoming part of the country’s everyday life.
Check out the latest update on the Bangladesh Startup Ecosystem.
The COVID-19 pandemic has affected all spheres of life and business but one of the hardest hit are the already vulnerable SMEs due to dependence on a short cash cycle, supply chain disruption, and loss of sales. To understand the current impact of the crisis on SMEs in detail, LightCastle Partners & Sheba.xyz collaborated on an independent study about the “COVID-19 Impact on the SMEs of Bangladesh".
LightCastle Partners’ annual flagship publication titled ‘The LightCastle Business Confidence Index 2019-20’ gauges the business sentiments of private sector leaders across several sectors, that have a notable contribution to the country’s economy. The industries to feature in this study were purposefully determined to include sectors that had the highest level of contribution to the country’s GDP.
Bangladesh Startup Ecosystem - The Untapped Digital Goldmine of AsiaLightCastle Partners
Bangladesh’s Startup Ecosystem has experienced incredible growth since its journey began in the early 2010s. The ecosystem is now coming of age, riding on - USD 200 million in investments, government initiatives, global & local accelerator programs propelling 1,000+ active Startups, who have created 1.5 million+ employment in Bangladesh with products and services which are increasingly becoming part of the country’s everyday life.
LightCastle Partners - Digital Commerce in Bangladesh : Policies & PossibilitiesLightCastle Partners
Despite the pandemic, Bangladesh, till Sep 2020, has clocked a GDP growth rate of 5.2% (ADB, 2020) - one of the highest in Asia.
Digital transactions are growing faster than ever. The first three quarters of 2020 saw a total od USD 65 billion+ digital transactions, where 72% of the transactions were dominated by MFS banking. With 96 million registered MFS users and USD 202 million daily MFS transactions, digital transactions can unlock new potentials of the digital commerce industry.
The eCommerce market (including f-commerce) has grown at a steady pace to USD 2.1 billion in 2020. The market holds the potential to become USD 3 billion by 2023 and can create around five lakh jobs in digital commerce industry.
Can the Digital Commerce Industry become a critical driving force of the future economy of Bangladesh?
LightCastle Partners presents "Digital Commerce in Bangladesh: Policies & Possibilities"
Demographics and socio-economic classes (across gender, rural/urban, income groups)
Type and nature of internet usage (content consumption, service transactions, product transactions, etc.)
Source: Cases study done by Google & its research partner
LightCastle takes a look at the role of NGOs/NPOs in Impact Investment and how they can make a change in the journey of budding SMEs and small businesses.
Since March of 2020, Bangladesh is experiencing the wrath of COVID-19 pandemic. As business shut down due to the lockdown, the entire startup ecosystem has been shaken to its core, threatening thousands of startups that create over a million jobs.
To understand the impact further, LightCastle Partners commissioned an independent study - “COVID-19 Impact on the Startups of Bangladesh”. The survey was conducted in late April with responses from over 200 startups from Bangladesh.
Disruption in the Retail Industry Through the Lens of B2B Retail Tech StartupsYogananth Gopalakrishnan
When every Startup innovation claims to be disruptive, disruptive loses its meaning. Most of what is claimed to be disruptive is really just an incremental innovation with a large dose of hubris.
Pic Courtesy: Boston Consulting Group [BCG]
Top Digital Trends Shaping Digital India by NASSCOMDivya Jain
Take a look at some of the best digital trends helping shaping up a digital India in 2018. Insights shared by NASSCOM experts.
https://community.nasscom.in
Just before the COVID 19 lockdowns started, the Indian FinTech ecosystem toped their Chinese counterparts in fetching funding first time in history.
As the pandemic gripped the economy, the FinTech companies are now at a product launch spree from health insurance to affordable loans for consumers and MSMEs.
Increase digital adoption is causing rapid growth for the sector. For example, as offline channels for financial services got restricted by the lockdowns and fear of infection, InsurTech and Online Brokerages are becoming the primary channel for the distribution of financial products.
But, all is not hunky-dory. The looming recession is expected to take a toll on some sub-sectors. For example, Alternative Lending companies especially involved in Retail Lending may face a tough test for their business models and algorithms used by them as many of them may start to face increased defaults.
Let us look into the details.
The report reflects on the role of broadband connectivity and the multiplier effect it has on the larger ecosystem. India is ripe for a Digital rethink, with both government and industry aligning their efforts toward a broadband powered Digital India. Broadband has the power to enable the gigabit society that is always connected. Broadband connectivity has changed the way people
communicate, socialise, create, sell, shop and work. India’s digital consumption patterns highlights the evolution. On an average Indians spend 200 minutes on mobile every day, with the second highest app downloads globally. Almost 79% of the web traffic in India is on mobile.
To realise the Digital India dream, there is a need to strengthen the broadband backbone, which forms a key pillar of this transformation. This report highlights the need for future ready and robust broadband infrastructure and the requisite efforts for expediting its reach.
MEDICI’s new ‘Africa FinTech Report 2020’ is a deep-dive into the sector; it analyzes segments, funding patterns, M&As, partnerships, and countries, and offers perspectives that have been drawn out of regulatory, economic, and market dynamics.
Before the pandemic, themes that were driving technology demand in the capital markets were regulatory compliance and cost-cutting.
Technologies in demand in the capital markets in recent years were Big Data, AI/ML, Blockchain, and Cloud Computing.
Even amid the global economic gloom, the capital markets were not uneventful. As per S&P Global, the global bond issuance is expected to be 16% higher in 2020 compared to 2019 amid record-low interest rates and markets flooded with liquidity. As per data from the World Federation of Exchanges, the value of share trading globally registered a 49.74% increase in H1 of 2020 compared with H2 of 2019. Exchange-traded derivatives volumes were up 23.4% when compared with H2 2019, reaching a record 21.72 billion contracts traded.
Cost pressures, exacerbated by COVID-19, likely to accelerate automation initiatives as banks cut headcounts rapidly.
Technology implementations due to compliance requirements such as the Second Markets in Financial Instruments Directive (MiFID2) and the Fundamental Review of the Trading Book (FRTB) likely to be sources of demand for companies providing technology to the capital market sector. The companies providing automation of compliance processes are already attracting a higher amount of venture funds. Technology providers focusing on Data Analytics, AI/ML, IaaS and Biometrics, etc. are expected to gain from the trends.
Another important factor is the rapid adoption of work-from-home culture. A significant portion of the firms may opt for a permanent work-from-home or a hybrid work culture. This shift is likely to increase demand for cloud transformation services.
Even though many financial services firms may cut IT spending for a few quarters, compliance automation, cost-cutting initiatives, and cloud transformations will continue to create demand for capital market technology providers.
Global Digital Payment Industry amid COVID-19Sam Ghosh
The COVID-19 pandemic has caused a drastic decline in economic activity worldwide. This decline of economic activity affected the digital payment industry as well.
Data from VISA and Mastercard show that payment volume decreased by ~20% in the April-June 2020 quarter from the Oct-Dec 2019 quarter. The July-September 2020 quarter saw a slight recovery but the volumes were still lower than the Oct-Dec 2019 quarter. Debit payments seem to recover quicker than credit payments, especially in the US.
Cross-border transactions were severely affected due to lower trade volumes and international travel restrictions. This resulted in a drastic drop in cross-border transaction revenue for both VISA and Mastercard.
Though the payment companies are facing revenue pain in the short term, long-term prospects are brighter. The pandemic has quickened the adoption of digital payments across age groups. Adoption of digital payments by the elderly population is especially encouraging and can open up new business opportunities.
Big-Tech companies are also rapidly increasing their foothold in the payments industry through acquisitions, patents, and partnerships.
New technologies such as contactless payment and real-time payment also got a boost due to the pandemic.
Governments around the world encouraged residents to use digital payment systems as the pandemic emerged. In some cases, restrictions were placed on cash withdrawals and cash transactions.
Fee waivers, compliance relaxations, consumer protection, etc, measures were taken to boost digital payments.
In India, the Reserve Bank of India has introduced a framework for the recognition of a Self-Regulatory Organisation for Payment System Operators.
A summary overview of the fintech landscape in Bangladesh. We first take a look at the global history of fintechs, then the history of fintechs in Bangladesh.
Using the Financial Hub Readiness (FHR) Index that I personally developed, I identified and assessed the strengths and weaknesses of various global fintech hubs. Based on this assessment, I proposed a hypothetical P2P lending and funding transfer product, that can be financed and implemented by major technological players in the ecosystem.
This project was done to fulfill my requirement for the Internship course, for my BBA undergraduate program at Institute of Business Administration, University of Dhaka. This was the first time I had to work alone on an academic project of this magnitude. I am very satisfied with how it turned out, given the limited time and resources I had to execute it.
Special thanks to all of my colleagues, peers and friends who advised me, in both professional and emotional capacities, when I was working on this project.
Bangladesh: Forecast of Growth Industries & Tax Incentives for IndustriesLightCastle Partners
Unlike many of its South Asian neighbors, Bangladesh has been experiencing a continuously increasing GDP growth rate for the last five years – driven by strong consumption and public investment, recovery of apparel exports and high remittance growth. The Government has created liberal investment and business operation policies regarding taxation, import duties and work documentation among others, in a manner that encourages greater foreign investment in the secondary and tertiary sector. Drawing lessons from the Chinese economic success story, Bangladesh is promoting industrialization by setting up Special Economic Zones across the country, while attracting investments through investment friendly policies like tax holidays. The policy focuses heavily on thrust sectors that are primarily export oriented such as agro-based industries and manufacturers that specialize in ICT, artificial flower-making, electronics, frozen food, jute goods, jewelry, leather, oil, gas, textiles, construction and tourism.
SME Fintech Opportunity in the Developing CountriesSam Ghosh
There were around 30 million Small and Medium Size Enterprises (SMEs) in the developing countries before the pandemic. 2/3rd of global SMEs were located in developing countries. Developing countries with top SME populations are China, Thailand, Bangladesh, Indonesia, Tanzania, India, and Brazil, etc.
Most of these SMEs in the developing countries are in the informal sector lacking formal financing options and proper business processes. The pandemic has tested these SMEs to the extreme damaging their existing sales channels, supply chain, and financing sources. Governments in the developing countries (ex. China) pushing the SMEs for digital adoption to deal with revenue losses amid social distancing. This policy support can be very beneficial for startups in the sector.
COVID-19 pandemic has accelerated digital adoption in developing countries as consumers are forced to adopt digital channels for services such as education, healthcare, and grocery, etc. At the same time, small businesses are adopting digital channels for survival. This creates a unique opportunity for tech startups serving small businesses in developing countries.
The major problems that the small businesses are facing are revenue losses, operating challenges due to social distancing, lack of credit access, supply-side issues such as labour shortages, raw material access, etc. Tech startups can tap into the market by providing solutions to these pain points - sales platforms to deal with revenue losses, process automation to deal with operating challenges, alternative lending to deal with lack of credit access, HR management technologies to deal with the labour shortages, etc.
Small businesses often do not have defined operating processes. Changing customer preferences for digital modes require that small businesses also define their internal processes. The tech companies in this sector need to hand-hold small businesses by helping them design internal processes. Process automation companies are likely to benefit from this.
Often small businesses are dependent on one or few key people. As the pandemic brought drastic changes to our daily lives, the human aspect of the pandemic cannot be ignored. For example, many female entrepreneurs experienced the increased daily burden of homeschooling their children as the schools were closed. This kind of aspect brings unique opportunities for tech companies to design products for the sector.
Emerging Cyber Security Opportunity in IndiaSam Ghosh
$1.5 Trillion - that was the size of the Global cybercrime market in 2018. In comparison, the Indian GDP in the same year was US$2.7 trillion. The Dark web activity has spiked over 300% since 2017. As per NortonLifeLock Cyber Safety Insights Report, 2019, globally 350 million consumers became the victim of cybercrime only in one year.
Back in India, the rapid growth of data-driven tech companies prompted the lawmakers to enact a legal framework for cybersecurity, especially around financial services. These legal requirements have driven the Indian Cybersecurity industry.
Just when the COVID-19 lockdowns started, cyber-attacks also surged. Between March and April 2020, India has witnessed a staggering 86% increase in cyber-attacks.
Due to social distancing, many industries are rapidly getting digitised almost in a haphazard manner, bringing more and more critical data online. This is creating a fertile ground for cybercrime.
The pandemic is bringing unique challenges for both enterprises and individuals in terms of protecting their sensitive data from cyber-attacks.
People who never shopped online are now shopping online, people who shopped online before are shopping for things online which they never shopped online. The rapid growth of e-payments is bringing unique challenges not only in terms of payment security but also privacy and fake/illegal eCommerce sites.
The IT spending is expected to be lower this year but companies are prioritising security spending with spending on cloud and collaboration.
The medium to long-term prospects for the cyber-security industry looks promising given the rapid digitisation of digitally naive industries, increasing access to enterprise systems from mobile devices, migration of critical processes to the cloud systems, and increasing online transactions, etc.
Apart from that, as many small and medium-sized businesses are forced to adapt to the increasingly digital world, demand for cyber-security products/platforms is expected to increase as many smaller businesses may not have the resources to avail security consulting services.
This document brings together a set
of latest data points and publicly
available information relevant for
Platforms & Applications Industry.
We are very excited to share this
content and believe that readers will
benefit from this periodic publication
immensely
Bangladesh Startup Ecosystem Report- The Untapped Digital Goldmine of AsiaImpactors Connect
Bangladesh’s Startup Ecosystem has experienced incredible growth since its journey began in the early 2010s. The ecosystem is now coming of age, riding on - USD 200 million in investments, government initiatives, global & local accelerator programs propelling 1,000+ active Startups, who have created 1.5 million+ employment in Bangladesh with products and services which are increasingly becoming part of the country’s everyday life.
LightCastle Partners - Digital Commerce in Bangladesh : Policies & PossibilitiesLightCastle Partners
Despite the pandemic, Bangladesh, till Sep 2020, has clocked a GDP growth rate of 5.2% (ADB, 2020) - one of the highest in Asia.
Digital transactions are growing faster than ever. The first three quarters of 2020 saw a total od USD 65 billion+ digital transactions, where 72% of the transactions were dominated by MFS banking. With 96 million registered MFS users and USD 202 million daily MFS transactions, digital transactions can unlock new potentials of the digital commerce industry.
The eCommerce market (including f-commerce) has grown at a steady pace to USD 2.1 billion in 2020. The market holds the potential to become USD 3 billion by 2023 and can create around five lakh jobs in digital commerce industry.
Can the Digital Commerce Industry become a critical driving force of the future economy of Bangladesh?
LightCastle Partners presents "Digital Commerce in Bangladesh: Policies & Possibilities"
Demographics and socio-economic classes (across gender, rural/urban, income groups)
Type and nature of internet usage (content consumption, service transactions, product transactions, etc.)
Source: Cases study done by Google & its research partner
LightCastle takes a look at the role of NGOs/NPOs in Impact Investment and how they can make a change in the journey of budding SMEs and small businesses.
Since March of 2020, Bangladesh is experiencing the wrath of COVID-19 pandemic. As business shut down due to the lockdown, the entire startup ecosystem has been shaken to its core, threatening thousands of startups that create over a million jobs.
To understand the impact further, LightCastle Partners commissioned an independent study - “COVID-19 Impact on the Startups of Bangladesh”. The survey was conducted in late April with responses from over 200 startups from Bangladesh.
Disruption in the Retail Industry Through the Lens of B2B Retail Tech StartupsYogananth Gopalakrishnan
When every Startup innovation claims to be disruptive, disruptive loses its meaning. Most of what is claimed to be disruptive is really just an incremental innovation with a large dose of hubris.
Pic Courtesy: Boston Consulting Group [BCG]
Top Digital Trends Shaping Digital India by NASSCOMDivya Jain
Take a look at some of the best digital trends helping shaping up a digital India in 2018. Insights shared by NASSCOM experts.
https://community.nasscom.in
Just before the COVID 19 lockdowns started, the Indian FinTech ecosystem toped their Chinese counterparts in fetching funding first time in history.
As the pandemic gripped the economy, the FinTech companies are now at a product launch spree from health insurance to affordable loans for consumers and MSMEs.
Increase digital adoption is causing rapid growth for the sector. For example, as offline channels for financial services got restricted by the lockdowns and fear of infection, InsurTech and Online Brokerages are becoming the primary channel for the distribution of financial products.
But, all is not hunky-dory. The looming recession is expected to take a toll on some sub-sectors. For example, Alternative Lending companies especially involved in Retail Lending may face a tough test for their business models and algorithms used by them as many of them may start to face increased defaults.
Let us look into the details.
The report reflects on the role of broadband connectivity and the multiplier effect it has on the larger ecosystem. India is ripe for a Digital rethink, with both government and industry aligning their efforts toward a broadband powered Digital India. Broadband has the power to enable the gigabit society that is always connected. Broadband connectivity has changed the way people
communicate, socialise, create, sell, shop and work. India’s digital consumption patterns highlights the evolution. On an average Indians spend 200 minutes on mobile every day, with the second highest app downloads globally. Almost 79% of the web traffic in India is on mobile.
To realise the Digital India dream, there is a need to strengthen the broadband backbone, which forms a key pillar of this transformation. This report highlights the need for future ready and robust broadband infrastructure and the requisite efforts for expediting its reach.
MEDICI’s new ‘Africa FinTech Report 2020’ is a deep-dive into the sector; it analyzes segments, funding patterns, M&As, partnerships, and countries, and offers perspectives that have been drawn out of regulatory, economic, and market dynamics.
Before the pandemic, themes that were driving technology demand in the capital markets were regulatory compliance and cost-cutting.
Technologies in demand in the capital markets in recent years were Big Data, AI/ML, Blockchain, and Cloud Computing.
Even amid the global economic gloom, the capital markets were not uneventful. As per S&P Global, the global bond issuance is expected to be 16% higher in 2020 compared to 2019 amid record-low interest rates and markets flooded with liquidity. As per data from the World Federation of Exchanges, the value of share trading globally registered a 49.74% increase in H1 of 2020 compared with H2 of 2019. Exchange-traded derivatives volumes were up 23.4% when compared with H2 2019, reaching a record 21.72 billion contracts traded.
Cost pressures, exacerbated by COVID-19, likely to accelerate automation initiatives as banks cut headcounts rapidly.
Technology implementations due to compliance requirements such as the Second Markets in Financial Instruments Directive (MiFID2) and the Fundamental Review of the Trading Book (FRTB) likely to be sources of demand for companies providing technology to the capital market sector. The companies providing automation of compliance processes are already attracting a higher amount of venture funds. Technology providers focusing on Data Analytics, AI/ML, IaaS and Biometrics, etc. are expected to gain from the trends.
Another important factor is the rapid adoption of work-from-home culture. A significant portion of the firms may opt for a permanent work-from-home or a hybrid work culture. This shift is likely to increase demand for cloud transformation services.
Even though many financial services firms may cut IT spending for a few quarters, compliance automation, cost-cutting initiatives, and cloud transformations will continue to create demand for capital market technology providers.
Global Digital Payment Industry amid COVID-19Sam Ghosh
The COVID-19 pandemic has caused a drastic decline in economic activity worldwide. This decline of economic activity affected the digital payment industry as well.
Data from VISA and Mastercard show that payment volume decreased by ~20% in the April-June 2020 quarter from the Oct-Dec 2019 quarter. The July-September 2020 quarter saw a slight recovery but the volumes were still lower than the Oct-Dec 2019 quarter. Debit payments seem to recover quicker than credit payments, especially in the US.
Cross-border transactions were severely affected due to lower trade volumes and international travel restrictions. This resulted in a drastic drop in cross-border transaction revenue for both VISA and Mastercard.
Though the payment companies are facing revenue pain in the short term, long-term prospects are brighter. The pandemic has quickened the adoption of digital payments across age groups. Adoption of digital payments by the elderly population is especially encouraging and can open up new business opportunities.
Big-Tech companies are also rapidly increasing their foothold in the payments industry through acquisitions, patents, and partnerships.
New technologies such as contactless payment and real-time payment also got a boost due to the pandemic.
Governments around the world encouraged residents to use digital payment systems as the pandemic emerged. In some cases, restrictions were placed on cash withdrawals and cash transactions.
Fee waivers, compliance relaxations, consumer protection, etc, measures were taken to boost digital payments.
In India, the Reserve Bank of India has introduced a framework for the recognition of a Self-Regulatory Organisation for Payment System Operators.
A summary overview of the fintech landscape in Bangladesh. We first take a look at the global history of fintechs, then the history of fintechs in Bangladesh.
Using the Financial Hub Readiness (FHR) Index that I personally developed, I identified and assessed the strengths and weaknesses of various global fintech hubs. Based on this assessment, I proposed a hypothetical P2P lending and funding transfer product, that can be financed and implemented by major technological players in the ecosystem.
This project was done to fulfill my requirement for the Internship course, for my BBA undergraduate program at Institute of Business Administration, University of Dhaka. This was the first time I had to work alone on an academic project of this magnitude. I am very satisfied with how it turned out, given the limited time and resources I had to execute it.
Special thanks to all of my colleagues, peers and friends who advised me, in both professional and emotional capacities, when I was working on this project.
Bangladesh: Forecast of Growth Industries & Tax Incentives for IndustriesLightCastle Partners
Unlike many of its South Asian neighbors, Bangladesh has been experiencing a continuously increasing GDP growth rate for the last five years – driven by strong consumption and public investment, recovery of apparel exports and high remittance growth. The Government has created liberal investment and business operation policies regarding taxation, import duties and work documentation among others, in a manner that encourages greater foreign investment in the secondary and tertiary sector. Drawing lessons from the Chinese economic success story, Bangladesh is promoting industrialization by setting up Special Economic Zones across the country, while attracting investments through investment friendly policies like tax holidays. The policy focuses heavily on thrust sectors that are primarily export oriented such as agro-based industries and manufacturers that specialize in ICT, artificial flower-making, electronics, frozen food, jute goods, jewelry, leather, oil, gas, textiles, construction and tourism.
SME Fintech Opportunity in the Developing CountriesSam Ghosh
There were around 30 million Small and Medium Size Enterprises (SMEs) in the developing countries before the pandemic. 2/3rd of global SMEs were located in developing countries. Developing countries with top SME populations are China, Thailand, Bangladesh, Indonesia, Tanzania, India, and Brazil, etc.
Most of these SMEs in the developing countries are in the informal sector lacking formal financing options and proper business processes. The pandemic has tested these SMEs to the extreme damaging their existing sales channels, supply chain, and financing sources. Governments in the developing countries (ex. China) pushing the SMEs for digital adoption to deal with revenue losses amid social distancing. This policy support can be very beneficial for startups in the sector.
COVID-19 pandemic has accelerated digital adoption in developing countries as consumers are forced to adopt digital channels for services such as education, healthcare, and grocery, etc. At the same time, small businesses are adopting digital channels for survival. This creates a unique opportunity for tech startups serving small businesses in developing countries.
The major problems that the small businesses are facing are revenue losses, operating challenges due to social distancing, lack of credit access, supply-side issues such as labour shortages, raw material access, etc. Tech startups can tap into the market by providing solutions to these pain points - sales platforms to deal with revenue losses, process automation to deal with operating challenges, alternative lending to deal with lack of credit access, HR management technologies to deal with the labour shortages, etc.
Small businesses often do not have defined operating processes. Changing customer preferences for digital modes require that small businesses also define their internal processes. The tech companies in this sector need to hand-hold small businesses by helping them design internal processes. Process automation companies are likely to benefit from this.
Often small businesses are dependent on one or few key people. As the pandemic brought drastic changes to our daily lives, the human aspect of the pandemic cannot be ignored. For example, many female entrepreneurs experienced the increased daily burden of homeschooling their children as the schools were closed. This kind of aspect brings unique opportunities for tech companies to design products for the sector.
Emerging Cyber Security Opportunity in IndiaSam Ghosh
$1.5 Trillion - that was the size of the Global cybercrime market in 2018. In comparison, the Indian GDP in the same year was US$2.7 trillion. The Dark web activity has spiked over 300% since 2017. As per NortonLifeLock Cyber Safety Insights Report, 2019, globally 350 million consumers became the victim of cybercrime only in one year.
Back in India, the rapid growth of data-driven tech companies prompted the lawmakers to enact a legal framework for cybersecurity, especially around financial services. These legal requirements have driven the Indian Cybersecurity industry.
Just when the COVID-19 lockdowns started, cyber-attacks also surged. Between March and April 2020, India has witnessed a staggering 86% increase in cyber-attacks.
Due to social distancing, many industries are rapidly getting digitised almost in a haphazard manner, bringing more and more critical data online. This is creating a fertile ground for cybercrime.
The pandemic is bringing unique challenges for both enterprises and individuals in terms of protecting their sensitive data from cyber-attacks.
People who never shopped online are now shopping online, people who shopped online before are shopping for things online which they never shopped online. The rapid growth of e-payments is bringing unique challenges not only in terms of payment security but also privacy and fake/illegal eCommerce sites.
The IT spending is expected to be lower this year but companies are prioritising security spending with spending on cloud and collaboration.
The medium to long-term prospects for the cyber-security industry looks promising given the rapid digitisation of digitally naive industries, increasing access to enterprise systems from mobile devices, migration of critical processes to the cloud systems, and increasing online transactions, etc.
Apart from that, as many small and medium-sized businesses are forced to adapt to the increasingly digital world, demand for cyber-security products/platforms is expected to increase as many smaller businesses may not have the resources to avail security consulting services.
This document brings together a set
of latest data points and publicly
available information relevant for
Platforms & Applications Industry.
We are very excited to share this
content and believe that readers will
benefit from this periodic publication
immensely
Bangladesh Startup Ecosystem Report- The Untapped Digital Goldmine of AsiaImpactors Connect
Bangladesh’s Startup Ecosystem has experienced incredible growth since its journey began in the early 2010s. The ecosystem is now coming of age, riding on - USD 200 million in investments, government initiatives, global & local accelerator programs propelling 1,000+ active Startups, who have created 1.5 million+ employment in Bangladesh with products and services which are increasingly becoming part of the country’s everyday life.
“After all, in order to achieve impressive results as other advanced countries, Vietnam needs to accelerate its labor productivity. The confrontation between the world’s development models ultimately lies in the fact that which model creates higher productivity. That is also the reason why we see great world’s powers competing against each other primarily not about trade, but technology. As technology is the way to help Vietnam get rid of its short-sightedness and strive for ambitious visions, the dream of Vietnam becoming an IT nation will soon come true."
In the last 5 years, Vietnam has been going through positive changes in digital transformation, thus moving forward into a digital economy and a digital society. Therefore, the wave of tech startups as well as startup projects from large companies, has continuously been on the rise. With the entire technology industry’s substantial growth in general, it can be said that by 2020, Vietnam will be considered as an IT nation of Southeast Asia. Minister of Information and Communications Nguyen Manh Hung said that an additional 50,000 IT businesses (ICT) is necessary for Vietnam to accelerate its digital transformation. A trend called Make In Vietnam is on a strong momentum where the developers and technology experts have considered more about bringing Vietnamese products to the world. Product companies are gradually showing their appearance.
At present, the IT industry is being evaluated as one of the leading industries in Vietnam. There is a number of more than 153 institutions training 50,000 IT personnel. According to experts’ assessment, Vietnam will be an ideal destination for leading technology companies in the world and the region to have their product development located. Particularly in the Vietnam market, there are numerous small and large startups developing potential projects directly related to AI and Machine Learning, which creates an abundance of outstanding values for the technology industry as a whole.
Report includes:
- Vietnam - New Destination;
- Vietnam - IT Talent Pool;
- Vietnam Developers' Salary;
- Vietnam IT Personnel Supply-Demand
Report by: https://topdev.vn
Information technology (IT) is the application of computers to store, study, retrieve, transmit, and manipulate data, or information, often in the context of a business or other enterprise. IT is considered a subset of information and communications technology (ICT).
The World Economic Forum has recently launched The Global Information Technology Report 2013.
In this presentation we have tried to put some important find outs from the same report and few other news and information from global media.
The topic was delivered by Shri B.S. Mubarak IFS, Director (South) – Ministry of External Affairs, Government of India, Delhi | Former Consul General of India in Saudi Arabia.
MEDICI’s new ‘Indonesia FinTech Report 2021’ analyzes the country’s FinTech sector and trends in the last three years—a deep-dive by segments & subsegments, funding patterns, M&As, ecosystem partnerships, industry drivers, and perspectives drawn out of regulatory, geopolitical, economic, and market dynamics.
Big Oppportunities, Clouded Possibilities for IT Services SectorPeopleWorks IN
With global IT spending projected to grow by 3.9 per cent, the IT services segment is all set to surpass its contribution to Industry revenue. Right Talent will be the ultimate source of comfort for firms like yours to support in your growth and business aspirations. PeopleWorks team pooled in resources to understand the challenges faced and the role of HR in IT Services Sector. The same has been documented and attached for your perusal.
ict industry
,
development of ict industry
,
government initiatives for promotion
,
strengths and weakness of ict
,
number of mobile subscribers
,
contribution of telecom sector of bd
The presentation identifies the policy framework toward FDI, monetary and non-monetary incentives offered by the government of Bangladesh to attract FDI, analyzes the rising FDI flow into Bangladesh during last ten years, the sectors attracting major FDI inflows, future of the potential sectors for investment in Bangladesh and identifies the foreign countries that are investing in the Bangladesh economy.
MSME Sector - Growth, Challenges & Opportunities Resurgent India
The MSME sector contributes in a significant way to the growth of the Indian economy across the realms of production system, employment generation, national output, exports etc. The MSME Sector comprises of approximately 48 million units that produce more than 6,000 products ranging from traditional to high-tech items. The sector is driving sustainable growth in Indian economy by providing employment to around 111 million people, accounts for 45% of the manufacturing output, 40% of the country's exports and contributes 8-9% to the country's GDP.
Leveraging ICT for Growth, Employment and Governance is a project of Bangladesh Computer Council (BCC) under the Ministry of Posts, Telecommunication and Information Technology. The project has been launched in January 2013 aiming to develop a vibrant and healthy Information Technology (IT) and Information Technology-Enabled Services industry in five years by identifying the strategies, programs and investment needed for the country to leverage ICT for economic growth and competitiveness.
Mapping your transformation into a digital economy with GCI 2018Huawei Technologies
The GCI provides a comprehensive and objective assessment of a country’s connectivity from both a national and business perspective, and assesses the current status, future trends, and challenges associated with digital transformation. It quantifies the value that connectivity generates for a country’s transformation into a digital economy, and serves as a reference for regional and national policy makers.
Similar to LightCastle Partners Bangladesh Hi-Tech Industries Vision 2030 (20)
Empowering Jute Diversified Products (JDP) Enterprises for Export ReadinessLightCastle Partners
“Women in Trade for Inclusive and Sustainable Growth (WITISG)” is a 5-year project funded by Global Affairs Canada & ITFC (Islamic Trade Finance Corporation). The project aims to contribute to inclusive growth in the economy by increasing the percentage of women in international trade as exporters and by increasing the share of exports generated by women-led Small and Medium-sized Enterprises (SMEs).
As the local coordinator for the WITISG project, LightCastle Partners assisted Trade Facilitation Office (TFO) Canada and the SME Foundation (SMEF) in empowering Jute Diversified Products (JDP) enterprises for export readiness. LightCastle Partners is the local coordinator & implementer for TFO Canada in Bangladesh for the project.
LightCastle’s role encompassed gathering applications from SMEs, screening and selection, assistance with skill development and documentation, and providing wide-ranging consultative support. As a consequence of LightCastle’s intervention, 14 Bangladeshi SMEs from the Jute Diversified Product (JDP) sector traveled to New York, USA, to participate in the New York Now 2023 (NYN 23’) Fair. This gave them the opportunity to showcase their product portfolio to key buyers in the US market, ranging from mega-retailers to boutique gift shops.
If you are interested to learn more, the infographics below will provide more in-depth information about the WITISG project and the impact of the intervention made by LightCastle.
The Biniyog Briddhi Investor Dealbook 2021 features the startups that applied and successfully secured the SIINC and IRMF fundings from Biniyog Briddhi in 2020 and 2021. These startups range from retail to agritech, spinning in various industries and impacting thousands of lives. The startups featured here are Apon Wellbeing, HelloTask, iFarmer, iPAGE, Joikko, Light of Hope, Romoni, Safewheel, Shuttle, and Solshare.
As access to finance is one of the key challenges these startups face in the early stage, it is important to select financing instruments that match an enterprise’s business model, needs, and the stage of development that the firm finds itself into, in order to help ensure the impact enterprise success and foster its development.
Apon Wellbeing is one of the successful enterprises to receive Social Impact Incentives (SIINC) from the B-Briddhi program. Through this partnership, Apon will benefit from financial incentives for achieving its impact goals in a scalable manner. How is Apon Wellbeing, an omnichannel marketplace, creating an impact for marginalized people working in large factories in Bangladesh?
Since Bangladesh’s independence back in the early 70s, the country has been evolving into an economic powerhouse. Bangladesh’s growth has accelerated over the last couple of decades, spearheaded by the apparel sector and augmented by remittance earnings, resulting in rising per capita income, which crossed the USD 2,200 mark in 2020.
From being dependent on donor funding for basic healthcare and nutrition to utilizing assistance in developing sustainable agricultural programs, Bangladesh’s Development Sector has evolved rapidly over the last 50 years. Donor funding has clearly played an instrumental role in the transformation of Bangladesh’s socio-economic landscape over the past five decades, lifting millions of poverty, empowering women and marginalized individuals, and facilitating access to basic education and healthcare facilities.
Check out how the donor funding landscape will evolve in light of Bangladesh’s shifting socioeconomic conditions and upcoming LDC status graduation. LightCastle Partners recently conducted a study to analyze the evolving landscape of donor funding in Bangladesh and the whitepaper highlights the key trends in the funding landscape over the last 50 years and evaluates the development sector’s funding trajectory for the next five years.
The state of the ecosystem for youth entrepreneurship in bangladeshLightCastle Partners
UNDP – under the Youth Co:Lab initiative co-led by UNDP and Citi Foundation – the Islamic Development Bank (IsDB) and Startup Bangladesh Limited produced this first-of-its-kind study to provide data-driven recommendations to strengthen the ecosystem for youth entrepreneurship in Bangladesh and amplify the potential of youth-led enterprises. The research for this paper was conducted and consolidated by LightCastle in an effort to provide an overview of the youth entrepreneurship ecosystem of our country.
This slidedeck attempts to answer the question by evaluating lockdown easing strategies applied by other nations and recommends adaptations for Bangladesh to employ such strategies.
[Presentation] Startup Ecosystem: Bangladesh — Coming of AgeLightCastle Partners
Bangladesh’s startup ecosystem has picked up rapidly since 2013 – driven by participation from angels; rise of eco-system enablers like co-working space, community events, local and global incubators; and a growing active interest from government/development partners. However, major deals and growth have started happening since the end of 2017. While a number of international/local funds have present operations along with incubator/accelerator programs for pipeline development in the economy, Series A funding is yet to properly kick off. The embedded presentation gives a high level overview of the current status, the story of evolution and growth, the promising and thriving sectors, the potential bottlenecks and the role of ecosystem enablers. The conclusion is clear: Bangladesh’s startup ecosystem is slowly, but surely, coming of age.
The information technology and information technology-enabled services (IT/ITES) industries require skilled
human resources to unlock their potential. This will provide the foundation for take-off, which, for now, is falling
short. As envisioned in Digital Bangladesh, the IT/ITES industries can adopt the latest technologies across
different industries and should grow hand in hand with other drivers of growth.
Access to quality higher education must rise to develop future industry leaders in IT/ITES. While the gross
enrollment rate of tertiary education in Bangladesh has more than doubled from 7.7% in 2007 to 17.6% in 2017,
this is still below the lower-middle-income country average of 24%. Demand for higher education in Bangladesh will
surely increase as the economy expands; thus, the question now is what higher education fields should Bangladesh
prioritize for investment. The IT/ITES industries need skilled graduates who can work up to global standards.
This tracer study, which aims to improve the labor market outcomes of tertiary graduates of computer science and
engineering and/or institutes of information technology in Bangladesh, will help in the preparation of a new highereducation project in the country to be funded by ADB, the Improving Computer and Software Engineering Tertiary
Education Project. While that project selected only four universities, this tracer study covered an additional five
universities in Dhaka. I hope that the study findings will prove informative and improve computer science and
engineering and/or institutes of information technology beyond the nine universities included.
As the apparel industry of Bangladesh aims to gain higher export in an increasingly competitive global market, sustainability, quality and digitization have become crucial forms of differentiation and competency. Wage digitization in the apparel sector directly affects the lives of 3.5 million people, who are employed in the industry, living under an income bracket of less than USD 150 a month.
Wage digitization is seen to have direct positive correlation with increase in financial inclusion and currently close to a million workers in the apparel industry are now receiving their salary as digital wages.
This report is published in association with Bill & Melinda Gates Foundation and focuses on the prospects of wage digitization in the apparel sector of Bangladesh and the inherent challenges and opportunities of the process.
The report covers the dynamics of the supermarket industry in Bangladesh and the sourcing methods of the major players. Also the challenges and the ways to overcome them and take this industry further.
Bangladesh is predominantly a rice-consuming country but with the rise in health consciousness, price hike of rice and industrial use to make biscuits, bread and other snacks, flour consumption is going up in Bangladesh. At present flour is the second most important food staple in Bangladesh and accounts for around 12 percent of cereal food consumption.
This article gives you a holistic view of Flour Industry in Bangladesh.
Shipbreaking industry plays an important role in the economy of Bangladesh by supporting steel industry, shipbuilding industry and other heavy and light engineering industries, and also by generating employment. But problems regarding safety, health and environmental issues create a negative image for the industry. About 90% of ship breaking in the world is done in India, Bangladesh, Pakistan and China.
2. Executive Summary
2
Bangladesh’s hi-tech industry is gaming forward on the back of following growth drivers:
Strong Economy Vitals for Tech Products and Services: Majority of the population of Bangladesh are young and tech-adaptable where 62%+ are under 35 years. The
Middle class is growing at 10% per annum to reach 34 million by 2025. Of the total population, 98% have mobile phone connection, more than 62% are on internet,
accounting for 102 million+ individuals with 94 million mobile internet penetration.
Alongside steady economic growth, the investment to GDP ratio of Bangladesh has grown to 32% (U$ 96Bn) in FY 2018-19 from 26% (U$ 26Bn) in 2009-10. However,
the country’s FDI stood at a mere 3% in CY 2019.
Local and Global Initiatives: Technological infrastructure and network enhancement services, national laptop assembly and mobile manufacturing factories from
global giants like Samsung, Huawei and Xiaomi have propelled the growth of the industry in Bangladesh. Notable initiatives from local pioneers Walton, Aamra and
Datasoft include smartphone manufacturing and assembly, development of world class IOT devices.
Tech Startups attracting FDI: The Bangladesh Entrepreneurship Ecosystem is at an inflection point with an excess of U$ 200 million in international investments from
big-name corporate investors and venture capitals, investing in industries like FinTech, Logistics, and Mobility over the last four years.
Government Initiatives building capacities and fostering Investments: More than 70,000 professionals from entry, mid and top management levels trained over the
last year. Multiple dedicated spaces ranging from 50,000 sq ft. to 62,000 sq ft. allocated for Incubation and Training programs in software parks and universities. In
addition, exemptions on Tax, Import Duty and Vat are attracting investments from developers and IT & ITeS firms.
Large workforce and price attractiveness are major drivers of growth: Currently the country’s employment stands at 77mn with over 5mn in the apparel sector. While
labor wages have risen in China, Bangladesh still capitalizes on lower wage rates. Moreover, Bangladesh has the cheapest industrial electricity tariff among peers
Low productivity and efficiency posing setbacks for growth:
With only 2-4% of existing factories being able to improve productivity, services, and compliance, the mid level management is still dependent on foreign talent.
Currently, labor productivity level in Bangladesh is 77% of China and 15% lower than India
Building global brand perception and strategic partnerships will lead the way in the Future:
Strategic partnerships across platforms can play vital role in gaining international coverage. “Building a brand perception around “Digital Bangladesh” can act as
country’s brand to gain local and global Hi-Tech demand.
3. Table of Contents
1. Overview: Macro Economy, Investment and Sectors
2. Sectoral Outline: Hi-Tech Industry
3. Challenges: Limiting the growth of the sector
4. Opportunities: What differentiates Bangladesh
5. Competition: Bangladesh’s position in the regional market
6. Destination Bangladesh: How can we attract investments?
7. Key Takeaways
5. U$1,855
GDP Per Capita
2019
27.9
Median Age
2019
• Bangladesh, the 39th largest economy and one of the fastest
growing countries, showed an impressive annual GDP growth
rate of ~6.5% over the last decade.
• GDP per capita has been growing at rates over 5% since 2015
peaking at U$ 1,855 (as of 2019), which is almost equal to
China in 2005.
• The economy is on track in graduating from the LDC status
in 2024 and has made impressive strides in human
development. PwC, a global consultancy, also predicts
Bangladesh to become the 28th largest economy in the
world by 2030.
• It dominates the global RMG market in 3rd position, right
after China and Vietnam, earning U$ 34Bn (83% of total
export earnings) as of 2019. It’s ICT sector is booming,
exporting U$ 800Mn worth of service across the globe.
• The country has a population of 164 Mn and has reached
37% urbanization. Connectivity has reached its peak, with
98% mobile phone connection (161Mn) and 62% internet
penetration (102Mn) and 57% mobile internet penetration
(94Mn).
Source: BTRC, World Bank, UNCTAD, Ministry Briefings, BBS, EPB & Bangladesh Bank
164Mn
Population
2019
U$34Bn
RMG Exports
FY 2018-19
5
161Mn
Mobile Subscribers
May 2020
102Mn
Internet Users
May 2020
94Mn
Mobile Internet Users
May 2020
U$3.61Bn
FDI
Average (2010-19)
U$41Bn
Total Exports
FY 2018-19
U$800Mn
ICT Exports
FY 2018-19
~6.5%
GDP Growth Rate
Average (2010-19)
U$299Bn
GDP
FY 2018-19
Economic indicators of the past decade
suggest growth for the country
6. Investment in the country
has grown ~4X over the last decade
102 115 128 133 150 172 195 221 250 274 302
26% 26%
27%
28%
28%
29%
29%
30%
31%
31%
32%
-
50
100
150
200
250
300
350
25%
26%
27%
28%
29%
30%
31%
32%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
GDP (U$ Bn) Investment as % of GDP
6
Alongside steady economic growth, the investment to GDP ratio of Bangladesh has grown to 32% (U$ 96Bn) in FY 2018-19
from 26% (U$ 26Bn) in 2009-10.
219 520 432 498 541 280 697 911 539 1,124 804
365 365 490 588 697 989 1,145 1,215 1,279 1,309 1,467
117 29 215 207 361 282 394 206 333 1,180 603
700 913 1,136 1,293 1,599 1,551 2,235 2,333 2,152 3,613 2,874
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Equity Capital Re-invested Earnings Intra-company Loans
Investment as % of nominal Annual GDP of Bangladesh FDI Breakdown by Component (U$ Mn)
Source: Bangladesh Bank, World Bank & LightCastle Analysis
7. Foreign Direct Investment
Comparison with regional peers
7Source: Bangladesh Bank, World Bank & LightCastle Analysis
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: UNCTAD World Investment Report, World Bank Data
Comparison with Regional Peers: FDI as % of GDP
Bangladesh India Indonesia Myanmar Pakistan Sri Lanka Vietnam
Despite the excellent progress, the country’s Foreign Direct Investment (FDI) in CY 2019 stood at a mere 3% (U$ 2.87Bn) of
the country’s total investment. With policymakers devising policies to attract FDIs, investments are expected to increase in
the new decade
8. • LightCastle Partners annually conducts ‘LightCastle Business Confidence Index’ – a study for gauging the
business sentiments of private sector leaders across myriad sectors, having a notable contribution to the
country’s economy.
• This year’s study was conducted based on in-depth interviews with 59 business leaders from March 2020 to
April 2020.
Source: Business Confidence Survey conducted by LightCastle 2019-20 8
Promising sectors for the new decade
findings from the ecosystem
Promising Sectors Derived from Business Confidence Index Study
Fiscal Year 2016 - 17 Fiscal Year 2017 - 18 Fiscal Year 2019 - 20
Power & Energy ICT & ITES Pharmaceuticals
ICT & ITES Agro-Processing Agro-Processing
RMG Pharmaceuticals ICT & ITES
Pharmaceuticals Power & Energy Logistics
Leather Goods (Footwear) Leather Goods (Footwear) Digital Financial Services
Increased DecreasedUnchanged
9. Source: Business Confidence Survey conducted by LightCastle 2019-20 (n = 59) 9
Promising sectors for the new decade
Based on sentiments of 59 CXO members
Confidence* Industry Rationale
32% Pharmaceuticals
• Increased health consciousness among the mass and ageing population is expected to drive
demand in the future.
• Bangladeshi pharmaceutical products already meet local demand and are now gaining traction
globally
32% Agriculture and
Agro-processing
• Changes in demographics, lifestyle habits and increased urbanization have driven a sea change in
how people consume food, burgeoning the demand for convenient, processed and ready-to-eat
foods.
25% ICT & ITES
• Outsourcing can gain traction locally with increased adoption of IT and technology-based
solutions, further catalysed by the advent of coronavirus, and the subsequent trend towards
digitization of essential services and physical channels/platforms.
12% Logistics
• With increasing demand for better logistic support, the need for an integrated ecosystem may
finally be met, expanding the scope for the sector in the future.
10% Digital Financial
Services
• Although Digital Financial Services are becoming increasingly popular opportunities for financial
inclusion and greater scope of development for the industry remain for Bangladesh.
*Percentage of industry experts having confidence in the sectors’ future developments
11. Hi-Tech Manufacturing, IT and ITeS Segments
comprise the broader ICT sector – with Startups rapidly disrupting the space
11
Information &
Communications
Technology
Information
Technology
IT-Enabled
Services
Hi Tech
Manufacturing
Startup
Disruptive Tech
12. 12
Local Companies Spearheading Hi-Tech Growth
Global manufacturers joined the fray
Origin Companies Notable Activities
Global
Companies
• Operating its 58,000 sq. ft. assembling factory
• Operating its own plant with 15% market share
• Providing technological infrastructure and network enhancement services
• Planning to set up laptop assembling factory
• Planning to set up mobile manufacturing plant
Local
Companies
• Produces & assembles in its 50,000 sq. ft. facility
• BDT 1 Bn IPO for business expansion & debt servicing
• Produces and assembles phones in 61,000 sq. ft. facility
• Partnered with Microsoft, Oracle, Cisco, Tata, Bharti Airtel & Telekom Malaysia
• Developed IoT device to solve water supply crisis in Saudi Arabia
Source: International Data Corporation Not an Exhaustive List*
13. Bangladesh IT-ITES Market
Coming of age
13Not an Exhaustive List*
BJIT
Datasoft
Soundtech
Reve
Brain Station 23
Selise
Millennium
Dohatec
SSL Wireless
Genweb2
Brac IT
Leadsoft
BAT
Spectrum
SSD TechService Engine
Graphic People
Kazi IT
Devnet
Digicon
Bv creatives
FIFO Tech
Augmedix
TigerIT
AmberIT
Dataedge
Dream71
Databiz Software
Kaz Software
Zaman IT
Nano IT
Softograph
Intelligent Machines
Global Brand
Info Bangla
Maxzion IT
Best IT
Shellsoft
Softweb International
IBCS-Primax
iNEXTerior
Halal IT
TweeTech
mybdWeb
Cefalo
Infosys
Enosis Solutions
JoomShaper
Wedevs
BI
Non-
Voice
BPO
Mobile
App
Developm
ent
Product
and
SAASImage
Processi
ng
Enterp
rise
Solutio
ns
Cloud
Web-
based
Developm
ent
• The government targets an astounding USD 5
billion and promises to create employment for
around 200,000 people by 2021.
• The IT and ITES industry of Bangladesh has grown
by 40% annually since 2010.
• The sector, comprising of around 1,200 companies,
has been declared as a thrust sector by the
Government to meet its goal of being a digital
economy by 2021 and a knowledge-based economy
by 2041.
• The sector’s prospect is being driven by a young
workforce interested in freelancing and IT, lower
cost for human resources, government incentives
including IT-based training and increasing
establishment of IT Parks.
• The industry enjoys numerous incentives such as
exemption of income tax, value added tax (VAT)
and customs duty and 10% cash incentive for
exporters.
Source: LightCastle Primary Analysis – IT-ITES Market Sizing (n=30), BASIS
14. Bangladeshi Startups
Rapidly picking up new disruptive technology
Growth Sectors: Sectors with large funded startup base with the highest adoption of deep-
tech coupled with local & global investor attraction
Emerging Sectors: Sectors with medium funded startup base with relatively low-to-high
adoption of technology and medium investor interest
Nascent Sectors: Sectors with small startup base with relatively low investor activityInvestmentIndex
=f(Totalinvestment/TotalStart-up,Fundingbystages)
Maturity Index
= f (No. of Startups, % of funded, adoption of technology)
Nascent Sectors
• Gaming
• Agri-tech
• IOT, Analytics,
Deep Tech
Emerging Sectors
• EdTech
• Health Tech
• Service (Marketplace)
Growth Sectors
• Digital Finance & Fintech
• Logistics & Mobility
• Digital Media & Content
• eCommerce & Retail
Source: LightCastle Primary Analysis (n=100) 14
Fintech Logistics & Mobility
Travel Tech
Job Marketplace Service
eCommerce & Retail
Agri Tech Deep Tech
Digital Media and Content
EdTech
Health Tech
Software & Development
Startup Sector Maturity vs Investment
Not an Exhaustive List*
15. Source: https://www.lightcastlebd.com/startup-dashboard, LightCastle Partners, Anchorless Bangladesh, Crunchbase , Deal Street Asia, BD Startup Survival Guide, Bangladesh Startup Consortium
Startup Funding Landscape
Staying ahead of regional peers
15
Funded
Companies
77
Number of
Funding Deals
139
Funding Deals
Disclosed
74
Total Funding
(USD)
287Mn
Global Funding
(USD)
270Mn
Local Funding
(USD)
17Mn
Startup funding in Bangladesh is at an inflection point with
an excess of U$ 200 million in international investments
from big-name corporate investors and venture capitals,
investing in industries like FinTech, Logistics, and Mobility
over the last four years.
0M
0M
1M
3M
8M
9M
12M
19M
45M
61M
146M
AgriTech
Software
Education
Energy
Entertainment
Technology
Healthcare
Consumer Services
Ecommerce/Retail
Logistics & Mobility
Fintech
Investment Breakdown by Sector (USD Mn)
5M
0M 0M
10M
15M 19M
5M
13M
107M
91M
38M
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Startup Funding Raised (USD Mn)
17. Major Hurdles for Growth
Lack of skilled manpower and underdeveloped infrastructure
Bangladesh
India
Philippines
Vietnam
Sri Lanka
Talent availability & quality InfrastructureCountry
WEF Infra Rank: 120
WEF Infra Rank: 51
0.3 Mn p.a. with few
certifications
6.5 Mn p.a. with IT/ITeS
certifications
0.5 Mn p.a. suited to ITeS
0.3 Mn p.a. to grow the
IT sectors
0.03 Mn p.a. with strong
certification focus
WEF Infra Rank: 112
WEF Infra Rank: 85
WEF Infra Rank: 55
LowModerateHigh
Lack of skilled middle managers
Middle management is still dependent on
foreign talent
Low Labor Productivity
Productivity level in Bangladesh is 77% of
China and 15 pp lower than India
Lack of skilled workers for High Value Products
On 2-4% of existing Factories are able to
improve productivity, services and compliance
Low Labor Productivity
IT/ITeS are yet to pick up high end services
Source: WorldBank, ADB
P.A: Per Annum | WEF: World Economic Forum
18. Source: World Economic Forum, Doing Business 2020 - World Bank, Doing Business- Economy Profile Bangladesh - World Bank,
Destination Bangladesh - PwC
Hindrances in Attracting Foreign Direct Investment
Short-term and Long-term Challenges
18
Challenges Type Details
Short-term
Challenges
Regulatory
Uncertainty
Bangladesh often fails to keep the promises displaying a lack of coordination owing to bureaucratic
tangles that discourage investors.
Absence of Adequate
Policies
The lack of a dedicated comprehensive FDI policy has been an Achilles’ heel for Bangladesh. Moreover,
the scope of signing free trade agreements (FTAs) is available that remains unutilized.
Restriction in Profit
Repatriation
Bangladesh Bank often creates hurdles in profit repatriation, one of the preconditions of FDI, which is
obstructing FDI inflow. This means foreign investors face difficulties to take back their money or
dividends.
High Taxation and
VAT Policies
Coping with the competition, the corporate tax rate and VAT policies need to be revised to inject the
nation with high FDI inflow.
Long-term
Challenges
Lower Rank in Ease of
Doing Business Index
The level of convenience of doing business in a host country plays a crucial role in making investment
decisions. Bangladesh struggles to gain investors’ confidence as it severely lacks in the Ease of Doing
Business index by the World Bank
Underdeveloped
Capital Market
Bangladesh’s underdeveloped capital market highly contributes to the investment decision of foreign
companies as it negatively influences investors’ confidence.
19. Source: IMT Solutions, The Economic Times, International Labor Organization, Open Gov
Maldives
India
Malaysia
Sri Lanka
Vietnam
• Investment from Samsung, Microsoft, Intel, LG in chip and smartphone manufacturing and R&D
• 14,000 businesses spanning hardware, software, and digital content
• Potential to attract USD 21 bn investments in the next 5 years
• Electronics, aerospace & medical devices have witnessed the entry of global companies
• Launched its modern national hi-tech training facility
backed by South Korea in 2019 investing USD 26 mn
• Received USD 11 mn from ADB to bring in a single electronic platform to improve the speed and efficiency
of cross-border control procedures employing the latest in high-tech systems
• By 2025, it will be able to achieve improved labor productivity, increase manufacturing’s contribution GDP,
enhance innovation capacity and create more high-skilled jobs through its Industry4WRD
Regional Market Competition
is getting intense in recent times
19
21. • Labor force: 77 Mn
• Employment in apparel sector: 5 Mn
Industry growth factors emanating from
high labor supply
Source: Expert calls, Local player interviews, ILO Monthly Nominal Wages - Manufacturing, BPDB, Ministry of Power (India), Vietnam Electricity Board, Bloomberg, BCG
80 100
175
370
Bangladesh India China (Tier 2) China
Indexed Shop Floor Wage
Low-skilled labor available
at 20-70% lower wages
85
100
225
Bangladesh India China
Indexed Managerial Wage
8.59
9.27
15.8
Bangladesh India China
Avg. Industrial Electricity Tariff (Ȼ / kWh)
Cheapest industrial
electricity tariff among peers
Drivers for Sectoral Growth
Higher labor supply and cheaper power tariff than peer countries
22
High quality for
low & lower-mid
apparel
Bangladeshi factories are well-known
for supplying good quality and large
order sizes
Large
Labor Pool
Price
Attractiveness
• Lower wages compared to
competitors
• Wages in China have risen
22. Source: World Economic Forum, Doing Business 2020 - World Bank, Doing Business- Economy Profile Bangladesh - World Bank, Destination Bangladesh - PwC
Doing Business Index
Govt. has taken an initiative to become double digit by 2025
23
Ranking in 2020
63rd
70th
73rd
99th
108th
168th
Pakistan
India
Sri Lanka
Vietnam
Indonesia
Bangladesh
The World Bank Group’s Doing Business 2020 study ranked Bangladesh 168th in the
global ease of doing business rankings this year from 176th in the previous year.
The government of Bangladesh has undertaken a number of initiatives to improve the
ranking :
• Setting up a new business became less expensive with the reduction of
registration and name clearance fees and removal of the certifying fee for digital
certificates.
• In Dhaka, obtaining an electrical connection was made more efficient as the city
invested in digitization and human capital. At the same time, the country reduced
the amount of the security deposit required for a new connection.
• Access to credit information was improved thanks to expanded coverage by the
credit information bureau. This reform delivered Bangladesh’s most significant
improvement.
• Bangladesh Investment Authority (BIDA) has introduced an One Stop Service
Center to assist foreign investors.
23. Source: World Economic Forum, Bangladesh Hi-Tech Park Authority
36 Firms allocated spaces in Sheikh Hasina
Software Tech Park
15 Firms operating currently in Janata Tower
Software Tech Park
62,000
Sq. ft.
Incubator & training centre being built in
KUET Incubator & Training Centre
62,000
Sq. ft.
Incubator & training centre built in
Bangabandhu Sheikh Mujib Hi-Tech Park
50
Startups allocated spaces and co-spaces
in Janata Tower Software Tech Park
2
IoT firms currently operating in
Bangabandhu Hi-Tech City
50,000
Sq. ft.
Incubation house being built in CUET
Business & Incubator Centre
60,000
Sq. ft.
Laptop assembling factory built in
Bangabandhu Hi-Tech City
Infrastructure development in Hi-Tech Parks
need to keep up for attracting investments
24
24. 25
CXO professionals trained in Hong Kong
University
Source: World Economic Forum, Bangladesh Hi-Tech Park Authority
Skill development initiatives
need to continue fostering investments in Hi-Tech Parks
65,000 Professionals trained in the past year
6,000 Trained under Support to Development
project 65
Further CXO professionals trained by
Hong Kong University trainees
4,000+
Young professionals trained under the
Skill Enhancement Program 17,500 To be trained in Sheikh Kamal Training &
Incubation Centre
36,000
Sq. ft.
Training house being built in CUET
Business & Incubator Centre1,000+ Trained under the Mid Level Training
Program
25
25. 10
Year
Tax holiday followed by 2-year tax
exemption for developers
3
Year
Tax holiday followed by 7-year tax
exemption for IT & ITeS firms
0% Import Duty for capital machinery
100% VAT exemption for procurement provider
80% VAT exemption for electricity distributor
10
Year
Tax exemption (50%) to dividend, capital
gain & royalty & technical fees 100%
Ownership opportunity for foreign
investors
3
Year
Tax exemption (50%) for foreign
employees
Source: Bangladesh Hi-Tech Park Authority
New Incentive Packages
for Hi-Tech Park investors is competitive than earlier
26
27. Source: LightCastle Analysis
Increase Focus Towards Creating Global Brand Perception
Alongside capturing local hi-tech demand
28Source: LightCastle Analysis 28
Leverage Growing smartphone and laptop demand.
Capitalize on Government incentives and tax subsidy for value addition in country
Target Investors and Stakeholders including global brands and
consumer technologies like Dell, Lenovo, Samsung, Amazon, PayTM and
many more.
Capturing local
Hi-Tech Consumer
Demand
Strategic partnerships across platforms can play vital role in gaining
international coverage
Create advocates from globally acclaimed Bangladeshis / influential NRBs to reach
out to prospective investors and create positive association
“Digital Bangladesh” can act as country’s brand instead of “Beautiful Bangladesh”
Creating global
brand perception
28. Finished product
import
Product
Assembling
Component
Transit
Component
Manufacturing
Raw material
transit
Raw material
procurement
Initial investment
More value addition
towards the left
High duty on
finished product
import
Cheap labor
Utility subsidies
High duty on
component import
Cheap labor
Utility subsidies
Same price of raw
material in all
geographies
Same price of raw
material in all
geographies
Free land
Tariff-free E&M
Interest-free capital
Regulatory
Scope to be
locally cost
competitive
HIGHHIGHMEDIUMMEDIUMLOWLOWHIGH
Source: LightCastle Analysis
Goal for Bangladesh: Capture Higher Value Addition
By gradually move towards the left of the manufacturing supply chain
29
Limited opportunity for localization in the short-term
• Low duties on import of components
• Paucity of skilled workforce for value-added
manufacturing
30. Takeaway Details Impact on Growth
Entrance of Global
Payers
• Following the success of local firms such as Walton Hi-Tech Industries, Aamra Companies, Datasoft Systems,
global companies such as Huawei Technologies, Samsung, Transsion Holdings, Xiaomi Technologies have either
joined the fray or planning to.
⚫
Local hi-tech
consumer demand
• Lack of skilled manpower and underdeveloped infrastructure are major barriers to scale up hi-tech manufacturing in
the country. Focus should increase towards capturing local hi-tech consumer demand, moving towards the left of
the manufacturing supply chain to capture higher value addition and creating global brand perception.
⚫
Consistent Skill &
Infrastructural
Development
• Current skill and infrastructural development initiatives from public and private enterprises and hi-tech parks, tax
incentives from the NBR need to keep up for attracting foreign investments.
⚫
Lucrative hi-tech
local market
• Lucrative hi-tech local market of USD 2.3 billion growing at a CAGR of 24%, high labor supply, cheap power tariff,
Government commitment, stable economic growth rate of 6-7% per annum in the last decade – reflect a positive
landscape for foreign investors.
⚫
Competition
• Competition in the regional market is getting intense in recent times – with countries such as Vietnam, India, Sri
Lanka, Maldives, Malaysia attracting multi-million dollar foreign investment deals for hi-tech projects.
⚫
Improve Doing
Business Index
• Improvement in the Doing Business Index will be crucial for Bangladesh to attract foreign investments – as it
currently scores below major competitors such as Vietnam, Philippines, India, Sri Lanka in 7 out of 10 factors.
⚫
Barriers
• Lack of skilled manpower and underdeveloped infrastructure are major barriers to scale up hi-tech manufacturing in
the country.
⚫
Key Takeaway
⚫ Growth Driver ⚫ Hurdle
31
31. LightCastlePartners
Level 5, House 10/12, Road 1, Block B, Niketan, Gulshan 1,
Dhaka - 1212, Bangladesh
Email:info@lightcastlebd.com
Mobile: +8801744 736621, +8801711 385988
Web:www.lightcastlebd.com
DataonDemandPlatform:www.databd.co
Mehad ul Haque
Project Manager & Sr. Business Consultant
LightCastle Partners
Risalat Huda
Business Analyst
LightCastle Partners
Bijon Islam
Chief Executive Officer
LightCastle Partners
Silvia Rozario
Project Manager & Sr. Business Consultant
LightCastle Partners
Ishtiak Mourshed
Business Analyst
LightCastle Partners
Authors