The Bangladesh startup ecosystem is coming of age, with sectors like fintech and logistics leading the way. The ecosystem has grown rapidly since 2013 with the establishment of accelerators, incubators, coworking spaces, and events. Major deals and growth have increased since late 2017. While seed funding is available, series A funding is still developing. Top sectors for investors include e-commerce, fintech, and impact businesses. The future of the ecosystem depends on continued access to funding, a talented workforce, and an improved business environment.

1. Prepared ByPrepared For
STARTUP ECOSYSTEM
Bangladesh: Coming of Age

2. Prepared ByPrepared For
Table of Contents
• Executive Summary
• Growing opportunity for Startups to capitalize on venture capital asset class
• Bangladesh’s outlook looks vibrant in numbers
• Startup ecosystem is gaming forward following on to bigger headlines
• Local entrepreneurs are the drivers of the ecosystem
• With Fintech leading the way, the overall confidence of the ecosystem looks positive
• 67% of the investors are optimistic about the future
• Recent deal dynamics is signaling a promising future
• Accelerators and Incubators within the system
• Investors within the system
• Key Takeaways

3. 3
• Startup Ecosystem has picked up rapidly since 2013 with participation from angels, starting up of eco-system enablers like co-working
space, community events, local and global incubators, and active interest from government/development partners. However, major
deals and growth have started happening since end of 2017.
• As of now there are a number of international/local funds operating such as Fenox, BD Ventures, IDLC Venture Fund along with
incubator/accelerator programs for pipeline development. However, Series A funding is yet to properly kick off.
• In the recent years, ride-sharing and logistics solutions have gained traction in the market. Other popular startup categories include
FinTech, Software, Web and Mobile Apps, Health Tech, and Digital Marketing. 83% of the founders have previous work experience with
57% previously founding a Startup. Top 3 reasons for starting a business are – passion, opportunity, and independence.
• 43% of the tech startups have raised seed funding compared to 8% for non-tech. Top 3 reasons for raising funds are Opex/Capex for
growth (42%), Product/Prototype Development (34%), and Customer Acquisition (17%). Preferred investor choices are Angels followed
by VCs and Friends/Family. Financial Institutions (especially debt capital) ranks last. Key success factors startups perceive to be critical –
Right Team, Access to Funding, and Right Connections.
• Top 3 choices for investors right now are e-commerce, Fintech, and impact businesses. Preferred investment sectors are Asset
Sharing and Logistics (85%), FinTech (83%), Health Tech (67%), Education Tech (67%), and C2C Commerce (50%). Critical success
factors according to investors – Team (83%), Market Potential (67%), and Scalable Idea (50%). Additional verticals that will get a lot of
attention in the coming days are Fintech (Digital Banking), Impact (Agriculture, Climate, Education, Health), and Robotics/Low-cost
Hardware.

4. 4
WHY BANGLADESH?

5. 5
172 million people (2021 Projection by BBS)
8th largest in the world
5th most densely populated
63% under 35 years
45% under 25 years
90% Muslim, highly homogenous
5,000+ IT graduates enter the market annually
2nd largest supplier of online labor
97% population subscribed to mobile services
161 million mobile phone users
94 million mobile internet users
99 million internet subscribers
98% 2G penetration across country
41% 3G penetration across country
Sources: BTRC, World Bank, UNCTAD, Ministry Briefings, BBS, WB
Strategic Location
at the Heart of Asia
Beneficial location at the
crux of “Chindia”

6. 6
299.1
BILLION USD
GDP
FY 2018-19
8.15%
GDP Growth Rate
FY 2018-19
32.69
BILLION USD
FOREX Reserve
(Dec 2019)
41.32
BILLION USD
Total Exports
FY 2018-19
34
BILLION USD
RMG Exports
FY 2018-19
800
MILLION USD
ICT Exports
FY 2017-18
2.15
BILLION USD
FDI
Jan-Sep 2019
160.8
MILLION
Mobile
Subscribers
(Dec 2019)
99.43
MILLION
Internet
Subscribers
Dec 2019
93.68
MILLION
Mobile Internet
Users
Dec 2019
Source: BTRC, World Bank, UNCTAD, Ministry Briefings, BBS, EPB, BB

7. 7
Digital
World
Connecting
Startups
GP
Accelerator
Entrance of
Local and
International VCs
Founder’s
Institute
Corporates
Tech SBUs
IDEA Project
– GOB
Spark
$2M for
Pathao
$5M for Zero Gravity
Robi
R-Ventures
$1.7M for SOLshare
JTI – Akij Acquisition
Banglalink
IT Incubator
Disclaimer: This list is indicative only and non-exhaustive
CHILD
ADOLESCENCE
BDT 100 crore for
Seed investment by
Startup Bangladesh
Evercare – Apollo
Acquisition
TEEN
ADULT
2
$1M for
Direct Fresh
$1.3M for
AjkerDeal.com
$2M for
CloudWell
$7M for
SureCash
Rise of Series A
Startups + International
VC Funding
$1.6M for ShopUp
Startup Bangladesh
Axiata–Airtel
Merger Acquisition
$10M For Pathao
$56M for bKash
$5.5M for Chaldal
$3.8M for Bdjobs
$15M for
Shohoz
$2M for
Deligram
$4.2M for
Sindabad
Bangladesh
Angels
Startup Documentary 2
by Startup Dhaka
JERA – Summit
Partial Acquisition
$1.5M
For ShopUp
$1M for Sheba
INFANT
Startup
Weekend
EMK
Center
Google
Facebook
Microsoft
$5M for
Bdjobs
Startup Documentary
by Startup Dhaka
Startup
Bash
Investment
Gov. initiative
Event
Ecosystem builder
Corporate M&A
Co-working Space
The Wave
Innovation
Xtreme
$1M for
Priyo.com
$10M for
GPIT
Hub Dhaka
1
3

8. 8
STARTUP LANDSCAPE AND SECTORS IN FOCUS

9. 9
Business Model
Top reasons for incubation: Networking with
potential investors/clients & Access to mentors
67%33%
TECH
vs
NONTECH
STARTUPS
55%
Hybrid
46%
B2B
Business Model
24%15%
Incubation/
Accelerators attended
43%8% Seed Finance Taken
Background of Entrepreneurs
83% Had previous work experience
80% Local Entrepreneur
57% Previously founded at least 1 startup
45% Came from Entrepreneurial background
Future Drivers for Success
93% Greater access to funds
45% Ease of doing business
33% Better technology infrastructure
Success Factors
93% Building a talented team
45% Access to funding
33% Right industry connections
Biggest Challenges
100% Finding/retaining the right team
76% Finding the right co-founder
4% Government Support
Passion
for the
cause
Opportunity
Identification
Independence
1
2 3
TOP REASONS FOR
FORMING STARTUPS
VC
2
FnF 3
Financial
Institutions4
Angel
Investors
1
PREFERRED INVESTORS
17%
34%
42%
OPEX/CAPEX &
Initial Growth
IT Infrastructure & MVP/
Product Development
Customer Acquisition
KEY INVESTMENTS
Source: Data compiled by LightCastle Partners across survey of 100 Startups

10. 10
65 62 60
57
50 48
45 45
42
37 35 33
27
19
(24)
40
Fintech
OnlineServiceMarketplace
Content/Media
Edutech
Ride-sharing
Logistics
Agritech
LifestyleSolutions
IoT,AI,Analytics,DeepTech
E-Commerce
Tourism
Healthtech
TechnologySolutions
Foodtech
DigitalMarketing
Startup Ecosystem Confidence Index
Sector-specific Confidence Overall Confidence
Source: Data compiled by LightCastle Partners across survey of 100 Startups during 2019

11. 11
INVESTMENT LANDSCAPE

12. 12
Preferred Investment Sector
85% Asset-sharing and Logistics
83% FinTech
67% Healthtech
67% EducationTech
50% C2C Commerce
Biggest Challenges
83% Finding the right team
50% Scalability of an idea
Expertise
67% Deal generation/Marketing
67% Operations
33% Strategy
Success Factors
83% Good team
67% Market potential
50% Scalable idea
83%17%
INVESTOR DEMOGRAPHICS
67%33%
VC
INTERNATIONAL LOCAL
ANGEL
Source: Data compiled by LightCastle Partners across survey of 15 Investors
Future Drivers for Success
67% Political stability
50% Better technology infrastructure
50% Greater foreign investment
Investor Portfolio
Tech; ECommerce; Impact

13. 13
Technology
Corporate
Logistics
E-Commerce
$1.6M
Seed Round
From
Omidyar Network
$1.5M
Seed Round
From
Sequoia Capital
$56M
Corporate Round
From
Ant Financial
$15M
Series A
From
Golden Gate Ventures
$4.2M
Series A
From
Aavishkar Venture Capital
$2M
Series A
From
Skycatcher
$1M
Series A
From
Epyllion Group
$2M
Series A
From
Gojek
$3.8M
Venture Round
From
Seek
$5M
Series A
From
The Frontier Fund
$5.5M
Series A
From
IFC
$1.5B
Acquisition
Of Akij Group
By Japan Tobacco
$10M
Venture Round
From
Gojek
$1.7M
Series A
From
IIX Growth Fund
$330M
Partial Acquisition
Of Summit
By JERA
$118M
Acquisition
Of Apollo Dhaka
By Evercare Group
M&A
Of Robi Axiata
And Airtel

14. 14
NOTABLE ECOSYSTEM BUILDERS AND INVESTORS

15. 15
LOCAL
GLOBAL
Startup Media
Universities
Competitions
Development Partners
Telecom
Gov. Initiative
COMMERCIALIMPACT

16. 16
THE ANGELS
NETWORK
Angel Syndicate
CorporateFoundation
Corporates
CorporatesGov.Initiative
LOCAL
GLOBAL
COMMERCIALIMPACT
Multilateral Development Agency
InvestmentCos.

17. 17
KEY TAKEAWAYS

18. 18
• Foreign Investors and startups are attracted by the consistent GDP growth, demographic bulge, density dividend,
and technology adaptable young population.
• Sectors such as ride-sharing and logistics have already captured the attention of VCs and Angel Investors. Rising
private sector consumption will keep driving both online and offline retail instigating the growth of logistics industry
even further. Growing financial inclusion has created significant potential for Fintech companies in Bangladesh.
Online service marketplace, Edutech and Agritech among other sectors have been marked as the next forces to
drive startup revolution.
• Government has started to revise policies such as declaring investment funds as a pass-through vehicle, allowing
Banks/NBFIs to invest in venture funds and special financing for SMEs and Startups. However, policies regarding
VATs and licensing requirements need to be further streamlined to cater to the needs of tech-companies.
• Alongside factors such as accelerators and incubation programs, mentorship and training, and availability of funds
in the market, the entire business environment in the country needs to transform in a way that facilitates the growth
of startups.

19. 19
THANK YOU
Bijon Islam
Chief Executive Officer
bijon.islam@lightcastlebd.com
Silvia Rozario
Business Consultant
silvia.rozario@lightcastlebd.com
Md. Risalat Huda
Trainee Consultant
risalat.lcp@gmail.com
AUTHORS
& ANALYSTS Mehad ul Haque
Senior Business Consultant
mehad.haque@lightcastlebd.com

20. 20
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