Sami Ahmed, Managing Director country’s government-backed VC fund Startup Bangladesh Limited, suggests that Bangladesh’s startup ecosystem is at an inflection point and that his work is aimed at helping the ecosystem to get to the next level. He suggests one of the goals of Startup Bangladesh Limited is to help produce at least five unicorns in Bangladesh by 2025.
As we wrote in the introduction to Mr. Ahmed’s interview, Bangladesh has consistently been named one of the fastest-growing economies in the world for the past several years. Many call the country the new Asian Tiger. A quick glance at Bangladesh’s GDP shows an astonishingly smooth growth path. The country of 160 million people has surpassed both its neighbors India and Pakistan in terms of GDP per capita. Bangladesh also outperforms its neighbors in a number of important human development indexes.
Compared to the economic opportunities the country offers, Bangladesh’s startup scene suffers from a puzzling lack of attention from global investors. Despite the phenomenal economic growth, a young demographic, and a growing middle class, Bangladesh sits at the bottom rung when it comes to attracting global funding for its startup ecosystem. For instance, in the first quarter of 2022, some 12 Bangladeshi startups raised about $57 million in disclosed funding. That's utterly insignificant compared to the opportunity the country offers.
Mr. Ahmed suggests that Startup Bangladesh Limited aims to contribute to changing that. He suggests the firm not only wants to invest in startups but also aims to help transform the country's startup ecosystem. The Government-funded VC firm has backed 15 companies so far and counts some of the most prominent startups in its portfolio. It is one of the most active local VC funds in the country.
“We're aligned with the vision of the government and we help implement it,” says Mr. Ahmed in a recent interview with Future Startup. “When I took the responsibility of Startup Bangladesh, I asked our state minister Zunaid Ahmed Palak to give me a target that he would like me to achieve—what's my one goal. I was told that we want to see at least five unicorns in Bangladesh by 2025. Now I know the target and the vision. And as the MD of the Startup Bangladesh, my goal is to achieve that vision. We're now aligning all our work to achieve that target.”
He then goes on to explain how Startup Bangladesh plans to do it:
“When we invest in a company, it is just the beginning of our work. Because if we want to have unicorns, we have to support these companies so that many of them have a chance to go big and some of them may even become unicorns. We have a lot of work to be done there such as guiding these companies and attracting other VCs to come in, that's where Startup Bangladesh needs to work so that we can create five unicorns by 2025.”
Mr. Ahmed appears to be clear-headed about the mandate of Startup Bangladesh. During the interview, he suggests that the firm is not a typical VC firm. “Generally, VC firms are optimized for a higher return. The objective is to make winning investments and ensure 10x returns. They look at the investments through the lens of the potential return. If it is an impact fund, they will look into impact, but the goal is to have an outsized return.”
He says “the main mission of Startup Bangladesh, however, is to develop an effective ecosystem so that we have a good supply of startups, they are getting funding, and they are being able to connect with the global VCs. Our goal goes beyond making money.”
Put into work, this understanding can help transform Bangladesh’s startup ecosystem. Bangladesh’s startup ecosystem has a long way to go. There are many challenges. The ecosystem is at a similar point to where Indonesia was 5-6 years ago. While the country should simply have more global attention, work also needs to be done in the policy space.
As a Government-backed VC fund, Startup Bangladesh sits at the intersection of the private sector and public sector—a fascinating position, which allows the firm the rare opportunity to see both worlds and provide practical policy inputs to shape the ecosystem.
As Mr. Ahmed rightly pointed out, being a government-funded firm, its mandate should be different from conventional VC firms. It should remain ambitious in terms of making investments in high growth and game-changing startups. In addition, the firm has this unique opportunity to do much more.
This is an excerpt from our interview with Sami Ahmed, read the full interview here.
