The numbers don't lie. A 41% decline in startup funding year-over-year isn’t simply a downturn – it’s a freefall. And the 95% collapse in local investment? That’s not a rollback, that’s a close to complete disappearance. We’re not discussing just a short-term disaster—you wouldn’t be that lucky if you were the manatee—we’re looking at an imminent ecosystem collapse. Or have we become spectators to the gradual throttling of Bangladesh’s startup culture? It certainly feels that way.

Local Funds Vanished Into Thin Air?

The data is stark. Foreign investment Subsequently, as local investment has virtually dried up, Bangladeshi startups often have little choice but to rely on foreign capital. 98% dependence on foreign funding — that’s not dependence, that’s dangerous vulnerability. Consider that same ship now underway on just one engine — and the other engine is being remotely operated from a foreign nation. How secure is that voyage? It’s not just a dollar issue — it’s control, it’s sustainability, and ultimately it’s the future of innovation itself.

Think of it like this: a farmer planting seeds in borrowed soil. They may reap a bountiful harvest, but the soil doesn’t really belong to them. They’re beholden to the person’s rules, the person’s priorities. Not least, what happens to your business model when that lender unexpectedly pulls out from under you. The crop withers. The farm dies. Is that really what we aspire for Bangladesh’s startups to be?

The absence of local investment isn’t only a financial issue—it’s a cultural one. Why aren't Bangladeshi investors backing Bangladeshi entrepreneurs? Is it a lack of trust? A lack of understanding? Or is it something more insidious: a risk-averse culture that prioritizes safety over potential? We cannot be afraid to address these hard questions. Our hope is that these answers will inspire more local investment instead of scaring it away.

FinTech's Regulatory Quagmire

FinTech startups are often the canaries in that coal mine. They are truly the tip of the spear when it comes to innovation, but they’re the first on the chopping block to regulatory whiplash. The reality that they’re having a hard time figuring out how to scale while crossing a minefield of unclear rules is a HUGE red flag.

The FinTech dilemma is a microcosm of the larger problem: a regulatory environment that stifles innovation instead of fostering it. One possible solution is the use of a regulatory sandbox. Simply establishing a testing ground is not enough, we need a clear and comprehensive plan to make it successful. For this to happen, we need a serious change in the regulator’s mindset, a realization that regulation should be an enabler, not a roadblock.

Consider this: the early days of the internet were marked by a "move fast and break things" mentality. That might not be fit for all sectors, but it points to the critical role that experimentation and iteration must play. We want to allow FinTech startups to space to do their thing, to create new things, and yes, to fail sometimes. For it’s through those mistakes that we learn and grow. Isn’t that the point of innovation?

Government Must Act, or Face Consequences

The government needs to step up. This is not solely about give aways or bailouts. It’s about ensuring a level playing field where true startups can flourish. The status quo is unsustainable, and if we don’t act now, we are at risk of losing an entire generation of entrepreneurs.

The decline in startup funding is a symptom of a deeper malaise: a lack of vision, a lack of courage, and a lack of commitment to innovation. The situation is not beyond saving. Only bold leadership and decisive action can steer Bangladesh toward its promise. By making building a supportive ecosystem a laser focus, our country can be an even more vibrant engine for entrepreneurship. The clock is ticking. Will we answer the call?

  • Streamline regulations: Cut the red tape. Simplify the procedures. Make it easier for startups to register, comply, and operate.
  • Incentivize local investment: Offer tax breaks and other incentives to encourage Bangladeshi investors to back Bangladeshi startups.
  • Strengthen IP protection: Protect intellectual property rights. Give entrepreneurs the confidence that their ideas won't be stolen.
  • Address the talent gap: Work with educational institutions to align curricula with industry needs. Provide more practical training, internships, and mentorship programs.
  • Improve infrastructure: Invest in better logistics, more reliable internet, and other infrastructure improvements that are essential for growth.

The decline in startup funding is a symptom of a deeper malaise: a lack of vision, a lack of courage, and a lack of commitment to innovation. But it's not too late to turn things around. With bold leadership, decisive action, and a renewed focus on creating a supportive ecosystem, Bangladesh can still become a hub for entrepreneurship. The clock is ticking. Will we answer the call?