Page 83 - IBT Sept 2021 (1)

Startup Industry REACHING
FOR THE STARS

As humankind advances, we are seeing new real-world experience. Also, the lack of
avenues being opened up. Coupled with THE BANGLADESHI STARTUP ECOSYSTEM innovation is also very evident. While many
next-generation technologies, we are now The startup ecosystem in Bangladesh initially grew on the startups in Bangladesh are direct replications of
witnessing several industries being back of two large metropolitans – Dhaka and Chattogram proven models in South Asia, there are many
transformed from the ground-up. People no around the early days of 2010. The sectors were also quite problems deep-rooted in our country that can be
longer stand in line to get takeaway food, well-defined, mostly hovering around IT, e-commerce and solved in unique ways. Innovation should be
rather get food delivered directly to their digital marketing. Over time, as new players entered the fostered, so that problems can be solved in our
doorstep with the click of a button. Roads are market and as industries started to take shape globally, own unique style.
now being filled with on-demand cars and Bangladesh witnessed the inception of ride-sharing and online
bikes, the riders of which get customers with food delivery startups. And there have been quite a few LESSONS FROM THE NEIGHBORING INDIA
the help of a smartphone app. Such radical significant global investments in our local startups over the While Bangladesh is growing steadily, our
changes and disruptive innovation can mostly years. Some of the notable ones were – Pathao (US$12 Mn neighboring country India has also been making
be credited to startups – high-growth from Go-jek), Shohoz (US$ 15 Mn from Golden Gate Ventures), remarkable progress. The Indian startup
companies who place technology at the center Deligram (US$ 2 Mn from Skycatcher. ecosystem, which defied odds during a
to ensure exponential growth. While the The startup ecosystem in Bangladesh has seen fabulous pandemic-hit year to create record 12 unicorns,
European and American markets have growth in the last decade. It has not only been about the has the potential to be the engine of growth in
witnessed the meteoric rise of startups like emergence of new startups, but also the increase of the medium to long run, according to the
Uber, Airbnb and Shopify – innovation of involvement of the other key stakeholders of the ecosystem. Economic Survey 2020-21. Currently, India is
similar scale has also taken place in this part The ecosystem now comprises around 1000 startups, with 200 home to 38 unicorns - startups with valuation of
of the world as well. Bangladesh has now new ones being formed every year. The 1000 active startups over USD 1 billion - as per the Nasscom Tech
introduced some of the most revolutionary have given employment opportunities to around 1.5 million Start up Report 2021. The US and China have better,
As stated by Nirjhor Rahman, the CEO of Bangladesh Angels,
products and services; that too made right here people. Investments have also skyrocketed as well, with US$ 243 and 227 unicorns, respectively.
at the heart of the country. Startups like 200 Mn injected into the economy To facilitate the growth of startups, the Indian “2021 represents a key harbinger for the ecosystem in
Bangladesh. We have already surpassed the entire investment
Pathao, Chaldal and Sheba.xyz are some of the in the last decade. Accelerators government had announced the 'Startup India,
many that are carrying the flag of innovation and incubators have also started Stand-up India' initiative. As on December 23, total of last year by Q3 of this year. We have had the biggest
edtech investment deal in the ecosystems' history in Shikho.
forward. The country is now generating more to emerge in order to nurture and 2020, the Indian government has recognized a
than 5000 IT graduates per year, and such assist the growth of these startups. total of 41,061 startups and 0.47 million jobs The announcement of Startup Bangladesh's inaugural fund
made incredible waves around the region. So things are
trends are expected to rise, considering almost Grameenphone Accelerator has The Government of Bangladesh is also playing a THE CHALLENGES OF THE ECOSYSTEM have been reported by more than 39,000 startups.
half of the total population is under 35 years long been the forerunner of startup massive role in bolstering the ecosystem. The Despite all the tales of possibilities, there are many avenues 319 startups have been granted income tax exciting. But even as more foreign, smart capital looks at the
market, we are hidebound by regulation. We still have
and a rapidly growing middle class expected to accelerators in Bangladesh, Government of Bangladesh has launched its that are yet to be addressed head-on. The first and one of the exemptions till November last year.
reach 34 million by 2025. But how are leading to the initial funding for flagship venture capital fund in March, 2020. most evident problems is the absence of mentorships and the Bangladeshi entrepreneurs raised roughly US$27 ambiguity in our processes and policies when it comes to
recognizing inbound capital, outbound repatriation, as well
Bangladeshi startups performing as a whole? companies like Sheba.xyz (online Named as Startup Bangladesh Limited, the availability of funds. While there are plenty of incubators and million in 2018, whereas Indian startups
What are the bottlenecks that are hindering service marketplace), CMED Health venture capital fund has an allocated share of accelerator programs, many of them are poorly structured, garnered US$4.2 billion. The disparity between cross-shareholding between Bangladesh and jurisdictions like
Singapore and US, where international investors would prefer
growth? Let’s take a look. (AI enabled healthtech platform), 500 crore taka. In 2021, the state-owned venture barely provide the entrepreneurs with proper resources and two economies with identical digital ecosystems
Repto (Online learning platform) capital firm announced to invest 100 crore taka eventually do not lead to much impact. demonstrates the lack of a supportive to invest.”
The value of the global startup economy is roughly USD 3
A POPULATION FILLED WITH and many others. Over the course in 50 startups in 2021. In accordance with the Also, market malpractices often lead to increasing expenses environment. Accelerator and incubator trillion. Through innovation, job creation, regulatory
POSSIBILITIES of the next few years, many other plan, the company has put in 15 crore taka in that eventually lead to winding down a startup at a very early programs, mentorship and training, and the breakthroughs, the growth of new industries, and cultural
Bangladesh as a whole is one of the well-suited accelerator programs also started to take shape. Some of the some of the leading startups of the country, phase. The other crucial challenge is a cultural one – the availability of financing in the market will not be revolution, the startup ecosystem assists the larger economy
places to launch and grow a startup. Why? most notable ones are – Banglalink Incubator, R-ventures (by namely Eduhive, Chaldal, Moner Bondhu, Dhaka perception that the elder generation has towards sufficient to close the gap. The entire business and society. Innovation increases operational productivity and
Because the massive population can ensure Robi), NSU Startups Next etc. Cast, Pathao, Intelligent Machines and Sheba.xyz. entrepreneurship. This deprives the ecosystem of many young, climate needs to change to make it easier for competitiveness, resulting in the creation of jobs that are not
scalability if the product-market fit is well and talented founders as young minds flock towards getting a startups to thrive. Our startup ecosystem has only high-quality but also well-paying. Innovation increases
technology adoption throughout the country is INVESTORS OF THIS GROWING ECOSYSTEM stable job rather than trying things out and experimenting come a long way since its foundation, but it still operational productivity and competitiveness, resulting in the
increasing exponentially. Being the 8th largest It is obvious that a tech-enabled, high-growth business will be with new ideas. Educators must be made aware of the benefits has a long way to go before it matures. creation of jobs that are not only high-quality but also
population of the entire world comprising 164 in need of constant funding in order to grow rapidly. The of their students working for startups, which include, but are WHAT DOES THE FUTURE HOLD? well-paying. Bangladesh is well positioned to achieve
million people, 98% of them are under the Bangladeshi startup ecosystem has also seen a number of not limited to, working in a challenging and ever-changing Bangladesh, the 39th largest economy and one of sustainable development goals through using disruptive
coverage of a mobile phone connection, 62% of local and global investors injecting capital, both monetarily environment, being flexible and adaptable, taking charge and technologies and innovative solutions, with an emphasis on
them have internet connectivity and around 94 and intellectually, in order to take the industry forward. The leadership when and where necessary, and so on. These the fastest growing countries, showed an financial inclusion, social fairness, and equal access to
impressive annual GDP growth rate of ~6.5%
million people are expected to use the wonders angel market has witnessed the presence of veteran angel abilities will help graduates advance in their respective fields technology. A methodical strategy to developing Bangladesh's
of mobile internet. That has led to the massive investor consortiums like Bangladesh Angels, SBK Tech in the future. One interesting method for companies to take is over the last decade. The country’s annual GDP startup ecosystem is an opportunity to accelerate the country's
growth rate officially surpassed that of India’s in
rise of app-based startups like Pathao, Ventures, Pegasus Tech Ventures, Bangladesh Venture Capital to approach instructors and cooperate with them on courses. progress with young people at the lead. This is a must-do in
HungryNaki, iFarmer, Sheba.xyz etc. While the and many more. Tech companies like Ant Financial and GoJek Students in the classes may be given assignments based on 2016 and has been higher than that of its order to nurture both the companies and leaders of tomorrow.
neighbor since then. So all hope is not lost, and
urban-rural divide is still an addressable issue, have also invested into the Bangladeshi startup ecosystem. challenges that startups encounter, and they will be expected Doing so will eventually lead us to the very promise of our
startups are growing fast enough in order to Corporate foundations like Omidyar Network and Bill & to solve these problems using the skills they have learned in with the entire world slowly adjusting itself with nation’s independence – a self-reliant, tech-enabled nation,
the new normal, the startup ecosystem in
ensure the rural residents can also get access Melinda Gates Foundation are also an integral part of the class. This will not only make the students aware of the brimmed to the full with infinite possibilities.
to these new products and services. industry. startup activities, but it will also provide them with valuable Bangladesh is set to come back stronger and

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