Bangladesh Fund of Funds, a Tk400 crore initiative by Startup Bangladesh Limited, has started operations to channel capital into startups through professional venture capital fund managers, aiming to attract private, institutional and international investment.
The government-backed fund began operations on Sunday through a Request for Expression of Interest (REOI) process to select eligible venture capital fund managers, according to Startup Bangladesh.
Unlike the previous government financing programmes, the fund will invest through selected professional managers, who will identify and finance promising startups while ensuring stronger governance and wider market participation.
Posts, Telecommunications and Information Technology Minister Faqir Mahbub Anam said the initiative aims to ensure promising ventures do not stop due to a lack of capital.
“Bangladesh has no shortage of talented entrepreneurs or innovative ideas. We want to create an environment where no promising venture stops for lack of capital,” he said at the launch event held at the ICT Tower in Agargaon.
He said the fund would be managed with emphasis on governance, skills and professionalism while encouraging private-sector participation in startup financing.
Startup Bangladesh, through its previous venture capital fund, has already invested nearly Tk111 crore in 36 technology-based startups, but the minister said government financing alone would not be enough to build a sustainable ecosystem.
The Fund of Funds will use public capital as catalytic investment to attract additional private, institutional and development financing into the startup market.
Bangladeshi startups have attracted around $1.2 billion in investment over the past decade, but local investors accounted for only about 7 per cent of deployed capital, according to Startup Bangladesh.
The new fund aims to strengthen domestic investment capacity and attract more foreign capital.
Prime Minister’s Adviser on Posts, Telecommunications and Information Technology Rehan Asif Asad said Bangladesh has talented entrepreneurs and innovative ideas, but startups need capital, experienced fund managers, global networks and market access to scale.
He assured that investment decisions would not be influenced by political affiliation or political considerations, saying startups would be selected based on merit and potential.
Rehan said venture capital would help diversify Bangladesh’s future economic growth, but startups also require mentorship, skills, market access and technological support.
The government has allocated Tk500 crore for startup development in the current fiscal year and introduced tax and VAT incentives, including a zero per cent turnover tax, to support technology-driven businesses.
ICT Division Secretary and Startup Bangladesh Chairman Md Mamunur Rashid Bhuiyan said the initiative would create an environment where venture capital and innovation can grow, with public capital providing the foundation and private investors bringing scale and expertise.
Startup Bangladesh Managing Director and CEO Nurul Hai said the fund would focus on professional fund management, strong governance and credible investment strategies.
The fund structure includes selection of fund managers, investment approaches and co-investment mechanisms to help high-potential startups expand.
Japan International Cooperation Agency representative Morikawa Yuko said the initiative could deepen Bangladesh’s venture capital market by attracting institutional and foreign investment and bringing international venture capital firms into the ecosystem.
She also highlighted the Sidecar Facility, which would strengthen the pipeline of investment-ready startups, increase available capital and improve investor capacity.
