39 Bangladeshi Banks Launch $35M Startup Fund

Thirty-nine Bangladeshi commercial banks have pooled capital to launch Bangladesh Startup Investment Company (BSIC), a US$35 million venture vehicle designed to address the lack of local institutional funding for late-seed to Series A rounds. Formed under the guidance of Bangladesh Bank, BSIC pools capital from a 1% net profit allocation requirement that has applied to commercial banks since 2021, consolidating fragmented capital into a professionally managed fund. The inaugural fund, called Onkur, is expected to make its first three investments in the fourth quarter of 2026.

Bangladesh’s Startup Funding Landscape

According to a report from local VC firm LightCastle Partners, Bangladesh’s startups raised US$124 million in funding in 2025. However, the vast majority of this figure—US$110 million—came from a single deal: the merger between Bangladeshi B2B commerce platform ShopUp and Saudi Arabia-based Sary. The report also showed that just 1% of the funding raised last year came from local investors.

This thin domestic capital base contrasts sharply with Bangladesh’s fundamentals: 178 million people, a median age of 26, a growing middle class, and a trajectory toward becoming the world’s ninth-largest consumer market by 2030. Seed capital is readily available through angels, accelerators, and a handful of local funds, but funding for late-seed, Series A, and Series B rounds is far harder to access. Founders have had to raise almost entirely abroad, typically requiring offshore incorporation and rounds structured around foreign LP preferences.

Dhaka skyline / Photo credit: Mahtab Hossein / Shutterstock

That dependency has grown more acute as international investors have become more hesitant to invest in emerging markets. BSIC is structured to address the problem from two directions: deploying domestic institutional capital directly while enticing international investors who may be more willing to participate alongside a credible local investor. The fund also targets a third pool that has largely sat on the sidelines: family wealth.

Rahat Ahmed, founder and managing partner of Anchorless Bangladesh and an advisor to BSIC, noted that because the banks backing the fund are institutions that wealthy families already trust, it gives local capital a credible process to invest alongside regularly.

Structure and Governance

BSIC is chaired by Mashrur Arefin, managing director and CEO of City Bank and chairman of the Association of Bankers Bangladesh. Its board draws from local banks—which include City Bank, Prime Bank, Mutual Trust Bank, Sonali Bank, and Pubali Bank—alongside independent directors.

According to Ahmed, the vehicle has a four-layer structure: a local investment team responsible for sourcing, an investment committee of professional VC practitioners, an advisory committee connecting global expertise to the board, and the board of directors representing the shareholder banks.

BSIC has already begun filling these roles. Dinar Ahmed, a partner at Canada’s BDC Capital, has joined the investment committee, while Sami Ahmad, a general partner at Eduardo Saverin’s B Capital, has joined the advisory board.

The investment process aims to protect decisions from the political pressures that have historically complicated state-adjacent capital in Bangladesh. Amir Khasru Mahmud Chowdhury, the country’s finance minister, stressed at the launch that BSIC would not be subject to political interference.

Challenges and Outlook

Dhaka traffic / Photo credit: SK Hasan Ali / Shutterstock

One Bangladeshi startup that has crossed the funding gap is Pathao, a logistics and ride-hailing firm. It raised US$12 million in a pre-Series B funding round led by Dubai-based VC firm VentureSouq.

Tammer Qaddumi, VentureSouq’s co-founder and general partner, was broadly supportive of the BSIC initiative but flagged two risks. The first is selection discipline. “What you don’t want this to be is an entitlement to anyone who wants to start a company,” he said. “The people approaching it should not treat them like a government agency obligated to give them money.”

The second is structural. Venture returns require an exit, and the banks backing BSIC may eventually find themselves as shareholders in companies disrupting their own businesses. “We are actually trying to find companies that are going to take market share away from these stakeholders,” Qaddumi pointed out. “That tension is going to be something very, very hard to manage.”

For founders in the country, what BSIC signals matters as much as the capital. Shahir Chowdhury, founder of edtech startup Shikho, which is currently raising its Series A round, said: “I think this can act as a catalyst to get a lot of foreign venture capitalists looking at Series A companies. If the 10 to 12 of us who are ready for Series A can get funded, it builds that momentum.”

FAQ

What is BSIC and why was it created?

Bangladesh Startup Investment Company (BSIC) is a US$35 million venture fund launched by 39 Bangladeshi commercial banks to address the lack of local institutional funding for startups at the late-seed to Series A stage. It was formed under Bangladesh Bank guidance to consolidate the 1% net profit allocation requirement that banks have been obligated to allocate to startup financing since 2021, which previously left capital fragmented across dozens of institutions.

When will BSIC begin making investments?

BSIC’s inaugural fund, Onkur, is expected to make its first three investments in the fourth quarter of 2026.

What are the main risks facing BSIC?

According to Tammer Qaddumi, co-founder of VentureSouq, two key risks are selection discipline—ensuring the fund does not become an entitlement for any startup founder—and structural tension, as the banks backing BSIC may eventually become shareholders in companies that disrupt their own businesses.