Tk600cr startup fund launched to spur innovation

A major institutional initiative aimed at strengthening technology-driven economy and innovation ecosystem has begun with the launch of the specialised institution “Bangladesh Startup Investment Company” (BSIC). 

Formed through a joint initiative of 39 banks with an initial capital base of Tk600 crore, the company is expected to be inaugurated today by Finance Minister Amir Khosru Mahmud Chowdhury.

Stakeholders say the initiative marks the beginning of a new era for startup ecosystem by creating fresh financing opportunities for young entrepreneurs and supporting long-term employment generation and technology-led economic growth.

Until now, the startup sector largely depended on foreign investment and support from a handful of large local corporations. 

The new initiative has, for the first time, established an organised and structured startup financing platform backed by the country’s banking sector.

Industry insiders believe BSIC will not only provide capital to emerging entrepreneurs but also support them in business management, technological development, international networking, and market expansion.

Under directives from Bangladesh Bank, the BSIC fund has been created using 1% of the profits earned by banks.

The company received registration from the Registrar of Joint Stock Companies and Firms (RJSC) on 7 December last year. 

Following the registration, the participating 39 banks began contributing 1% of their profits earned between 2020 and 2025 as capital for the company.

The company’s capital currently stands at around Tk600 crore. 

Every year, an additional 1% of banks’ profits -- estimated at nearly Tk200 crore -- will be added to the fund, allowing its size to grow steadily in the coming years.

According to BSIC sources, the current shareholding structure includes 7.71% by BRAC Bank, 6.74% by The City Bank, 6.67% by Dutch-Bangla Bank, 6.5% by Pubali Bank, 5.58% by Eastern Bank, 5.73% by Sonali Bank, and 4.98% by Prime Bank. Another 32 banks are also participating as shareholders at the initial stage.

The company’s board consists of nine members, including five managing directors of commercial banks and four independent directors. Masrur Arefin, chairman of the Association of Bankers, Bangladesh (ABB) and managing director of The City Bank, has been selected as the first chairman of BSIC.

Managing directors from Prime Bank, Mutual Trust Bank (MTB), Sonali Bank, and Pubali Bank are also serving as directors. Nazim A Chowdhury, additional managing director of Prime Bank, has been appointed acting chief executive officer (CEO). 

Meanwhile, the company is searching for an internationally experienced startup professional to serve as its full-time CEO.

Research and consultancy firm LightCastle Partners has been appointed as BSIC’s strategic advisor. 

Stakeholders say the firm will support the company in innovation assessment, market analysis, and startup risk evaluation.

“BSIC will function as a complete service provider for young entrepreneurs. It will not only provide capital but also regular monitoring and advisory support to help businesses succeed,” BSIC Chairman Masrur Arefin told the Daily Sun.

“Typically, 90% of startup ventures fail. But if even 10% succeed and one or two manage to expand into global markets, that itself will be our success,” he added.

He also said BSIC would follow international best practices and governance models used in startup financing worldwide. 

Bangladesh Bank Governor Mostaqur Rahman also wants the fund to contribute significantly to rural economic development across the country.

BSIC’s primary objective is to invest in innovative technology-based ventures. 

However, the company will not invest at the very initial stage. Instead, it will provide funding after a startup demonstrates growth potential, with investments expanded gradually in phases.

Priority sectors include healthcare, agriculture, education, retail services, the rural economy, communication, travel, logistics, and food products. 

In exchange for financing, BSIC will hold equity stakes in the respective startups.

If a startup demonstrates strong growth potential, the company will also seek to attract foreign venture capital so local entrepreneurs can gain access not only to overseas funding but also to global technology and business expertise.

Sources said BSIC plans to invest in at least three startups by 30 June this year. 

The company aims to finance between eight and 12 ventures during 2027 and 2028. After 2029, shares of successful startups may be sold through the stock market or through direct transactions.

Experts say the startup sector is one of the key drivers of employment generation, technological innovation, and economic growth in advanced economies worldwide. 

San Francisco is widely regarded as the global startup capital, where thousands of technology firms have emerged. Companies such as OpenAI, Uber, SpaceX, Stripe, and ByteDance all started as startups before becoming global brands.

Bangladesh has also seen success stories such as Pathao and 10 Minute School. 

Stakeholders believe that with proper financing and policy support, Bangladesh could also produce globally competitive technology companies in the future.

Analysts say the expansion of the startup sector could help transform young people from job seekers into entrepreneurs, generating both direct and indirect employment opportunities in technology, marketing, logistics, fintech, and digital services.

However, experts warn that startup investment remains a high-risk sector. Achieving success will require skilled manpower, experienced startup specialists, and professional project evaluation systems.

According to stakeholders, banks now need professionals who understand the mindset of young entrepreneurs, technology-driven business models, and global markets. 

Without proper project selection and due diligence, a significant portion of investments could face considerable risks.

Despite these challenges, stakeholders believe the launch of BSIC marks a transformative step for Bangladesh’s startup ecosystem and opens a new horizon for the country’s young entrepreneurs.