How to Get Funding for Your First Startup in Bangladesh

Short answer: Most first startups in Bangladesh are funded in stages: start with your own savings and early customers, then try government grants (such as the ICT Division’s iDEA grants of up to Tk 10 lakh), low-cost loans (Bangladesh Bank’s startup fund offers up to Tk 1 crore at 4% interest for founders aged 21 to 45, and its new-entrepreneur scheme offers collateral-free loans up to Tk 10 lakh), and only then equity investment from angels, Startup Bangladesh Limited or the new bank-backed Bangladesh Startup Investment Company (BSIC). Private venture funding has fallen sharply, to about $6 million in the first half of 2026, so founders who show real revenue and keep costs low stand the best chance.

An idea, a laptop and Tk 2 lakh

Rakib, 27, quit his job at a logistics company to build an app that helps small shops in Mirpur order stock from wholesalers. He has Tk 2 lakh in savings, two friends willing to work for shares, and a long list of questions. “Everyone talks about raising money,” he says. “Nobody tells you where to start.”

Why is startup funding so hard right now?

Bangladeshi startups raised $124 million in 2025 across 12 deals, but about $110 million of that came from a single deal, the ShopUp and Sary merger that formed SILQ Group. Global investors provided about 99% of the money, and local investors put in under $1 million, The Financial Express reported, citing LightCastle Partners. In the first half of 2026, funding fell 95% year on year to about $6 million across six deals, the paper reported.

Period	Startup funding
2024	$42 million
2025	$124 million (about $14 million excluding one merger)
First half of 2026	About $6 million

The lesson for a first-time founder: do not plan on a big venture round. Plan to survive on revenue, grants and cheap loans until you can show investors real traction.

What are your funding options?

Source	Typical amount	Give up shares?	Best stage
Savings, family and friends	Whatever you can raise	Sometimes	Idea
Customer revenue	Grows with sales	No	Any
Government grants (e.g., iDEA)	Up to Tk 10 lakh	No	Idea to early product
Bangladesh Bank startup fund loans	Up to Tk 1 crore at 4%	No	Early
New entrepreneur and SME loans	Up to Tk 10 lakh collateral-free (up to Tk 35 lakh with collateral)	No	Early, with a business plan
Angel investors	Small seed cheques	Yes	Early traction
Startup Bangladesh, BSIC and VC funds	Seed to Series A	Yes	Proven product and growth

1. Start with your own money and your customers

Most successful founders start by “bootstrapping”: using savings, keeping a side income and getting paying customers early. Pre-orders, service contracts and freelance or software work for foreign clients can fund your first months without giving up any shares. If you earn from abroad, you need a reliable way to receive the money; our guide on how to open a Payoneer account in Bangladesh explains one option, and you can sign up for Payoneer here.*

*Referral link: Dhaka Debates may receive a reward if you sign up, at no cost to you. It does not affect our coverage.

2. Apply for government grants

The ICT Division’s iDEA project has run grant programmes offering selected young entrepreneurs and startups up to Tk 10 lakh, without taking shares. Applications are reviewed by sector experts and judges, followed by a pitching round, and past calls covered sectors from healthcare and agriculture to fintech and e-commerce, The Business Standard reported. Calls open for short windows, so follow iDEA and the ICT Division for announcements. Universities, accelerators and competitions also offer smaller prizes and mentoring.

3. Use low-cost loans for young founders

Bangladesh Bank’s startup fund

Under Bangladesh Bank’s startup fund rules, banks can lend up to Tk 1 crore per project at 4% interest, for up to five years with up to one year’s grace period. Applicants must be 21 to 45 years old, work full time on the project, hold a training certificate as a new entrepreneur, and provide a guarantor instead of traditional collateral. Ten percent of the fund is reserved for women entrepreneurs, and money is released in at least three instalments after progress checks, The Business Standard reported when the scheme launched.

New entrepreneur refinance scheme

For cottage, micro and small businesses, Bangladesh Bank’s New Entrepreneur Refinance Scheme offers loans of up to Tk 10 lakh without collateral, and up to Tk 35 lakh against collateral, at a maximum of 7% interest. Graduates of entrepreneurship development programmes get priority, the finance minister told Parliament in June 2026 (Business Mirror). Ask your bank’s SME desk which schemes it currently runs, and read our guide to what it really takes to get an SME loan.

A loan must be repaid even if the startup fails. Borrow only for things that bring in revenue, keep up repayments to protect your CIB record, and do not personally guarantee more than you can afford to lose.

4. Raise equity from angels and funds

Equity investors give you money in exchange for a share of your company. They expect fast growth and an eventual exit.

• Angel investors are individuals, often successful business people or professionals, who invest small amounts early. Angel networks and founder communities are the usual way in.
• Startup Bangladesh Limited, the government’s flagship venture capital company, runs a Tk 300 crore co-investment fund for direct stakes in technology-driven companies and a Tk 400 crore fund of funds that backs professional VC funds, The Daily Star reported in August 2026.
• Bangladesh Startup Investment Company (BSIC), backed by 39 banks under Bangladesh Bank’s guidance, launched in May 2026 with about Tk 425 crore. Its first fund, ONKUR Bangladesh Fund I, invests at seed, late-seed and Series A stages, and planned its first three investments by the end of 2026.
• Private and foreign VC funds remain the largest source of big rounds, but they mostly back companies that already have strong growth.

The government has also allocated Tk 500 crore for startup development in the current budget and introduced tax and VAT incentives, including a zero turnover tax for eligible startups.

What do investors want to see?

• A real problem and paying customers, not just an idea.
• Traction: monthly revenue, users, repeat customers and growth rate.
• Unit economics: what it costs to win a customer and what each customer earns you.
• A committed team, with clear roles and shareholdings.
• Clean paperwork: a registered company, trade licence, e-TIN, bank account and simple accounts.
• A clear plan for how the money will be used and what it will achieve in 12 to 18 months.

How much of your company should you give up?

By our calculation, if an angel invests Tk 50 lakh at a Tk 2.5 crore valuation before the money comes in, the company is worth Tk 3 crore afterwards and the investor owns about 16.7%. Giving away too much too early leaves little room for later rounds and can weaken the founders’ control. Keep the first round small, raise only what you need for clear milestones, and take legal advice on the shareholder agreement.

A step-by-step funding plan for first-time founders

1. Test your idea cheaply and win your first paying customers.
2. Register the business, get a trade licence and e-TIN, and open a business bank account.
3. Keep simple monthly accounts from day one.
4. Apply for grants and competitions while you build.
5. Take a small, low-cost loan only for things that earn money.
6. When you have traction, prepare a short pitch deck and approach angels and funds.
7. Get a lawyer to review any investment or loan agreement before you sign.

Mistakes to avoid

• Spending on offices and ads before you have customers.
• Splitting shares among co-founders without a written agreement.
• Borrowing from informal lenders at high rates.
• Mixing personal and business money, which makes investors and banks nervous.
• Waiting for a big investor instead of building revenue.

Back to Rakib

Rakib signed up 40 shops before he wrote a pitch deck. He registered the company, applied for a grant, and is preparing a startup fund loan application with his bank. “Now when I meet an investor, I show them sales, not slides,” he says.

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This article is general information, not financial or legal advice. Scheme terms change; check current conditions with Bangladesh Bank, your bank or the fund before applying.

Frequently asked questions

Can I get a startup loan without collateral in Bangladesh?

Yes. Bangladesh Bank’s startup fund uses a guarantor and training certificate instead of collateral, and its new entrepreneur scheme offers collateral-free loans up to Tk 10 lakh.

What is the interest rate on Bangladesh Bank’s startup fund loans?

4% a year, for up to Tk 1 crore, repayable over up to five years with a grace period of up to one year.

Do government grants take a share of my company?

No. Grants such as iDEA’s do not take equity, but they are competitive and open for short periods.

How do I approach Startup Bangladesh or BSIC?

Check their websites for open calls and application criteria. They generally invest in technology-driven companies with a working product and growth.

Should I take a loan or sell shares?

Loans keep your ownership but must be repaid; equity does not need repayment but reduces your share. Early on, grants, revenue and small cheap loans usually cost founders less.

Key words explained

Term	What it means
Bootstrapping	Building a business with your own money and revenue.
Equity	Ownership shares in a company.
Angel investor	An individual who invests early in startups.
Venture capital (VC)	Professional funds that invest in fast-growing startups.
Seed / Series A	Early funding rounds, from first product to proven growth.
Valuation	What a company is judged to be worth when investors buy shares.
Grace period	Time at the start of a loan before repayments begin.
Traction	Evidence that customers want your product, such as sales and growth.

How we reported this

We used LightCastle Partners’ funding data as reported by The Financial Express, The Daily Star’s August 2026 report on BSIC and Startup Bangladesh funds, The Business Standard’s reports on Bangladesh Bank’s startup fund and iDEA grants, and Business Mirror’s report on the New Entrepreneur Refinance Scheme. The valuation example is our own calculation. The featured image is an illustration made by Dhaka Debates.

Editor’s note: Rakib is illustrative, created to show how a first-time founder might fund a startup. He is not a real person. All rules and figures come from the published sources listed with this article and our own calculations.