The government today launched a fund with an initial size of Tk 400 crore to boost investment in the country’s startup ecosystem, attract local and international capital, and strengthen the venture capital industry.
Startup Bangladesh Limited (SBL), the government’s venture capital and fund management institution under the ICT Division, announced the launch of the initiative, titled “Fund of Funds,” at an event at ICT Tower in Dhaka.
Over the past decade, Bangladeshi startups have attracted around $1.2 billion in investment, but local investors accounted for only about 7 percent of the total, according to a Startup Bangladesh statement.
The Fund of Funds initiative will seek to address this gap by strengthening local institutional capital, attracting foreign investment, developing the venture capital industry and building a sustainable startup financing structure, it said.
The fund will invest in selected local and international venture capital funds with strong governance, professional fund management and credible investment strategies, according to Nurul Hai, managing director and CEO of Startup Bangladesh.
The formal process for eligible venture capital fund managers also began through a Request for Expression of Interest (REOI), he also said while giving a presentation on the fund’s structure, investment strategy, fund manager selection process, co-investment mechanism and potential impact.
Speaking as the special guest at the event, Rehan Asad, the prime minister’s adviser for ICT and Telecom, said venture capital and the startup sector would play an important role in diversifying Bangladesh’s economic growth.
“Not only financing, startups also need mentorship, skills, market linkages and technological support. Through the Fund of Funds, these supports must be ensured alongside investment,” he said.
“The government is committed to protecting the interests of domestic and foreign investors investing in Bangladesh and to facilitating the easy repatriation of lawful profits and capital. Through collective efforts, it is possible to build a strong startup ecosystem,” he added.
Faqir Mahbub Anam, telecom and ICT minister, said Bangladesh has no shortage of talented entrepreneurs and innovative ideas, and that the government wants to build an investment-friendly environment where no promising venture is halted for lack of funds.
He said the Fund of Funds would be operated with the highest importance given to skills, good governance and professionalism.
Stating that Startup Bangladesh has already invested around Tk 111 crore in 36 technology-based startups, he said the private sector must also come forward to invest in startups rather than relying only on government financing.
Initiatives must not remain limited to paper, and their benefits must be ensured through practical implementation, the minister added.
Through the Fund of Funds, more private and international capital will be brought into the country while creating opportunities for Bangladeshi startups to enter international markets, he said.
Md Mamunur Rashid Bhuiyan, chairman of Startup Bangladesh and secretary of ICT Division, said the government wants to ensure an environment where venture capital and innovation can develop naturally.
If successfully implemented, the Bangladesh Fund of Funds will not only increase investment in startups but also build a strong investment infrastructure for the country’s future economy, he said.