Govt launches Tk 4b fund to draw local, global capital into startups

The government has launched the Tk 4 billion Bangladesh Fund of Funds to attract local, international and development capital to the country's startup ecosystem, shifting to channel public financing through professionally managed venture capital funds rather than investing directly in individual startups.

Startup Bangladesh Limited (SBL), the government's flagship venture capital and fund management company under the ICT Division, formally opened the fund-manager selection process on Sunday by issuing a Request for Expression of Interest (REOI) for eligible venture capital fund managers at a programme at ICT Tower in Agargaon, Dhaka.

The initiative is aimed at mobilising additional private and institutional investment, strengthening fund management and governance, and expanding access to growth capital for promising Bangladeshi startups.

Posts, Telecommunications and Information Technology Minister Faqir Mahbub Anam, who attended the programme as chief guest, said Bangladesh had no shortage of talented entrepreneurs or innovative ideas.

"We want to create an investment-friendly environment where no promising venture is held back because of a lack of capital," he said.

He said the Fund of Funds would be managed with a strong focus on efficiency, good governance and professionalism.

Startup Bangladesh has already invested around Tk 1.11 billion in 36 technology-based startups, but the government alone could not provide the financing needed to develop the sector, the minister said, calling for greater private-sector participation.

"Just keeping initiatives on paper will not be enough. We have to ensure that they work in practice and deliver benefits," he added.

The minister said the Fund of Funds would help bring more private and international capital into Bangladesh while creating opportunities for local startups to enter global markets.

"It is a game-changing initiative for our startup ecosystem," he said. "It will connect promising entrepreneurs with the capital, expertise and international networks they need to grow."

Prime Minister's Adviser for Posts, Telecommunications and Information Technology Rehan Asif Asad, speaking as the special guest, said venture capital and startups would play an important role in diversifying Bangladesh's future economic growth.

He said startups needed more than financing, including mentorship, skills development, market access and technological support.

"These forms of support must also be ensured alongside investment through the proposed Fund of Funds," he said.

The adviser also said the government was committed to protecting the interests of domestic and foreign investors and facilitating the lawful repatriation of profits and capital.

ICT Division Secretary and SBL Chairman Md Mamunur Rashid Bhuiyan said the government wanted to create an environment where venture capital and innovation could develop naturally.

"If successfully implemented, the Bangladesh Fund of Funds will not only increase startup investment but also build a stronger investment infrastructure for the country's future economy," he said.

SBL Managing Director and Chief Executive Officer Nurul Hai presented the proposed structure of the fund, its investment strategy, fund-manager selection process, co-investment mechanism and expected impact on the startup ecosystem.

He said selected domestic and international venture capital funds with strong governance, professional management and credible investment strategies would receive investment under the proposed structure.

"The Bangladesh Fund of Funds is not just about providing capital. It is about building the proper ecosystem Bangladesh will need for its next generation of startups," Nurul Hai said.

Japan International Cooperation Agency representative Morikawa Yuko said the Fund of Funds could deepen Bangladesh's venture capital market by attracting institutional and foreign investment.

She said the initiative could bring global venture capital firms into the ecosystem and expand financing opportunities for promising startups. The proposed Sidecar Facility would complement the fund by strengthening the startup pipeline, increasing available capital and improving investor capacity.

Over the past decade, Bangladeshi startups have attracted around $1.2 billion in investment, but local investors accounted for only about 7 per cent of the deployed capital.