The startup sector was given special importance in the 2026 election manifesto. The first major implementation of that promise came on 16 August, when the ‘Bangladesh Fund of Funds’ was formally launched at an event at the ICT Division in Dhaka. The government-owned venture capital firm Startup Bangladesh Limited (SBL) will manage the fund, and its initial size is Tk 400 crore, approximately US$33 million.
But this money will not go directly into the hands of any startup. The entire model is actually different, and that is the most important part of the announcement.
What Exactly Is a Fund of Funds
SBL’s work so far has been to invest directly in startups, as it has done in the case of Chaldal or Hishab Technologies. Bangladesh Fund of Funds is not following this route.
The fund will not go directly to any startup; instead, it will go to selected local and international venture capital fund managers. Those fund managers will then invest in Bangladeshi startups according to their own investment strategies. Simply put, instead of becoming a direct investor, the government is becoming a source of capital behind professional investors.
The condition is also clear. If a fund manager receives money from this fund, they must invest at least an equal amount of money in Bangladesh. This is called a 1:1 matching condition. Through this, every taka of government money will effectively bring twice that amount into the market.
Who Will Get the Money
This is where the biggest misunderstanding lies. The money from this fund will go directly to venture capital fund managers, not to individual startups.
According to SBL, the fund managers being considered must have:
- Strong institutional governance
- Professional fund management experience
- A clear mandate or plan for investing in Bangladesh
- A credible investment strategy and track record
Local, regional, and international fund managers will all be eligible to apply. There are no strict sector-based restrictions, but high-growth sectors such as financial services, e-commerce, logistics, healthcare, education, and agriculture will be given priority.
And the startups that will ultimately benefit will be seed- and growth-stage ventures registered in Bangladesh, with an existing minimum viable product and evidence of customer or revenue growth. But they will receive the money through fund managers, not by applying directly to SBL.
How to Apply
SBL has started the process through a Request for Expression of Interest (REOI). This is currently the only valid route for application.
The process for fund managers is as follows:
- First, go to SBL’s website and read the complete REOI document
- Check whether you meet the eligibility criteria specified for fund managers
- Submit the Expression of Interest (EOI) through the designated form on the website
- After passing SBL’s verification and selection process, discussions on fund allocation will begin
For those who want direct investment now, meaning startup founders, the route is different. SBL’s own venture capital arm is still active and continues to invest directly in startups as before. Applications there must be made through the separate ‘Application for Investment’ portal on SBL’s website, not through the Fund of Funds REOI process.
Why This Model, and Why Now
The statistics explain the reason. According to SBL, Bangladeshi startups have received approximately $1.2 billion in investment over the past decade, but the share of local investors was only around 7 percent. The lack of a professional venture capital ecosystem in the country is considered a major reason behind this.
The fund is part of a broader policy package. The current fiscal year’s budget has allocated Tk 500 crore to the startup sector, along with tax and VAT benefits such as a zero percent turnover tax. This fund is the next step in that process.
State Minister for Posts and Telecommunications Fakir Mahbub Anam MP was the chief guest at the event, while the Prime Minister’s ICT Adviser Rehan Asif Asad said that Bangladesh’s shortage is not of talent or ideas, but of a system where good ideas will not have to stop due to a lack of money. A representative of Japan’s development cooperation agency JICA was also present at the event, highlighting the international development cooperation aspect of the fund.
What You Need to Know in Brief
- Fund name: Bangladesh Fund of Funds, managed by Startup Bangladesh Limited
- Initial size: Tk 400 crore (approximately $33 million), with scope for future expansion
- Money will go to: Venture capital fund managers, not directly to startups
- Condition: Fund managers must invest at least an equal amount (1:1) in Bangladesh
- Fund duration: 30 years
- Application route: Read the REOI and submit an EOI through SBL’s website
- For startup founders seeking direct investment, the route is different, through SBL’s own VC arm
Tk 400 crore is not a very large amount by itself, especially when startups in the country have raised $1.2 billion over the past decade alone. But the real test of this fund is not its size, rather how much private and international capital it can attract. If the 1:1 matching condition actually works, this Tk 400 crore could effectively bring twice or more capital into the market. However, whether this plan will succeed will depend on the transparency of the selection process and consistency of implementation, not on the grandeur of the announcement.
