On 4th May, United Commercial Bank (UCB) announced that it plans to launch two alternative investment funds: a venture capital fund and a private equity fund of equal size BDT 3.5bn each totaling BDT 7bn, per TBS.
LankaBangla Securities Ltd, the top brokerage firm of Bangladesh, is among the early private sector players to launch an alternative investment fund with a target size of BDT 250 million.
In 2020, IDLC, one of the top NBFIs, launched a venture capital fund with a target size of BDT 450 million. In March this year, Bangladesh Bank also announced the formation of the BDT 5bn startup fund.
UCB is the first local commercial bank that has launched an alternative investment fund. The bank said it believes this initiative will add momentum to the startup investment ecosystem.
The startup ecosystem of Bangladesh has been receiving growing attention of late. However, access to funding has been a challenge for local founders. There is a shortage of active local venture capital funds. While international investors have been showing a growing interest in Bangladeshi startups, the attention is yet to produce significant results in the field.
This scenario, however, has started to change of late — thanks to a plethora of Government and private sector initiatives and a bunch of high-quality startups attracting international attention.
That being said, Bangladesh's startup ecosystem has a long way to go. Globally, Bangladesh’s startup ecosystem ranks 98, a far cry compared to our neighboring country India, which stands at 23rd in the global ranking of startup ecosystems. While UCB getting into space is likely to create new excitement, the country’s ecosystem needs more support.