- Startup funding in Bangladesh plummeted by 95 per cent year-on-year to $6.0 million in the first half of 2026, down from $120 million in the same period of 2025, according to a report by LightCastle Partners.
- In the first half of 2026, foreign investors supplied 100 per cent of the capital raised by Bangladeshi startups, with no domestic participation.
- The Bangladesh Startup Investment Company PLC, launched on May 12, 2026, is the country's first bank-backed venture capital platform, supported by 39 commercial banks under the guidance of Bangladesh Bank.
- The company has inaugurated its first fund, ONKUR - Bangladesh Fund I, worth US$35 million.
- Since 2013, Bangladeshi startups have raised around $1.1 billion, with 80 per cent going to late-stage deals; 98 per cent of that late-stage funding ($857 million) came from foreign investors.
- The FY2026-27 budget earmarks Tk 5.0 billion for the IT sector, including support for startups.
Bangladesh's startup ecosystem is facing a severe downturn, with funding dropping to $6.0 million in H1 2026, a staggering 95% decline from $120 million in the same period last year, according to LightCastle Partners.1
This dramatic fall highlights a troubling trend: foreign investors supplied 100% of the capital for Bangladeshi startups in the first half of 2026, marking a complete withdrawal of domestic investment.
Historically, since 2013, Bangladeshi startups have raised around $1.1 billion, with 80% going to late-stage deals. However, 98% of this late-stage funding—approximately $857 million—has come from foreign sources.5
In response to this funding crisis, the Bangladesh Startup Investment Company PLC was launched on May 12, 2026, becoming the country's first bank-backed venture capital platform. Supported by 39 commercial banks and guided by Bangladesh Bank, it aims to revitalize the startup landscape. The company has already inaugurated its first fund, ONKUR - Bangladesh Fund I, worth US$35 million.34
Additionally, the FY2026-27 budget allocates Tk 5.0 billion for the IT sector, including support for startups, indicating a potential shift in focus towards nurturing local innovation.6
“The new Bangladesh Startup Investment Company PLC, backed by 39 commercial banks, launched its first fund ONKUR - Bangladesh Fund I worth US$35 million. Meanwhile, AI attracted 74% of the $510 billion raised globally in H1 2026, with Revora securing $2.0 million in seed funding.”
