Startup investments drop 70% in Jan-Mar, receives only $6.7m in funding
The drop is even bigger compared to the same period last year—82%. However, total funding was slightly better than what the local startups secured in the July-September quarter last year, according to a LightCastle compilation of the disclosed deals.
Investments in Bangladeshi startups dropped 70% quarter on quarter (QoQ) to about $6.7 million in the January to March period as the global funding winter continues.
The drop is even bigger compared to the same period last year—82%. However, total funding was slightly better than what the local startups secured in the July-September quarter last year, according to a LightCastle compilation of the disclosed deals.
Moreover, in a continuation of the declining number of deals, only four Bangladeshi startups secured venture capital funding in the first three months this year, a significant drop from the 20 in the same period last year, while there had been seven deals in the last quarter of 2023.
PriyoShop, a first-generation local e-commerce platform, despite the subdued investments attracted $5 million in foreign funding in the first quarter this year, as it is betting bigger in the b2b e-commerce segment.
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Apon Wellbeing, a multi-channel marketplace start-up that provides affordable retail products with credit benefits and yearly health insurance coverage to apparel workers, secured a $1.5 million funding.
AI startup 'Hishab' received some $183,000 funding from the state-owned venture capital firm Startup Bangladesh. In contrast, in the first quarter of 2023, Startup Bangladesh had funded at least six startups.
However, Agri-tech startup 'Agroshift' got an undisclosed sum of early stage funding from ADB Ventures.
Shawkat Hossain, a director of Venture Capital and Private Equity Association of Bangladesh said, "With the high inflation and interest rates persisting, investors' appetite for high-risk high-return fields like startups has been subdued, be it they are global or local."
"The dried up funding made startups control their costs to survive till the venture capital resumes flowing robustly with the easing of the interest rate environment," he added.
Globally, startup investments dropped 26% QoQ to $44 billion in the first three months of this year.
Bangladeshi startups were the worst hit after Pakistani ones that saw no investments in the January-March quarter, following an investment of $39 million in the previous quarter.
In the January-March period, startup investment dropped 65% in Singapore, 69% in China, 27% in India, QoQ.
Disclosed investment in Bangladeshi startups dropped to $72 million in 2023 from $125 million in 2022, while in 2021, it surged to a record high of $432 million, including the $250 million Softbank investment in bKash.
Since the beginning of the funding winter in mid-2022, direct jobs at Bangladeshi startups have shrunk by a third to around 35,000, estimate industry insiders.
There are some 2,500 recognised startups in the country, including the lone unicorn Bkash, the leading mobile financial service firm, according to startup Bangladesh.
