Startup Support Surge: BSIC Launches Equity-Based Tech Fund with Bank-Backed Capital

Bangladesh Startup Investment Company (BSIC) has commenced its journey with funding sourced from 1 percent of the profits of 39 banks to finance emerging technology-based ventures or startups in Bangladesh. Formed with an initial capital of approximately Tk 600 crore, the fund is set to formally begin operations from 30 April.

This first large-scale venture capital company in the country includes Managing Directors (MDs) of the top five banks of the country on its board of directors. Research and advisory firm LightCastle Partners has been appointed as the strategic advisor of the new company.

Operating under the directive of Bangladesh Bank, the institution will provide equity-based financing rather than loans. This means BSIC will act as a partner in startups and will not charge any interest. According to relevant sources, the company has set a target to invest in at least three startups by 30 June. Initially, priority will be given to the health, agriculture, education, transport, retail, and logistics sectors.

Among the major stakeholders of BSIC are BRAC Bank (7.71%), City Bank (6.74%), Dutch-Bangla Bank (6.67%), Pubali Bank (6.5%), and Sonali Bank (5.73%). The size of the fund will continue to grow through annual contributions of 1 percent of the net profits of participating banks. The company plans to invest in 8–12 startups by the 2027–28 fiscal year.

The primary objective of the institution is to develop local startups to be competitive in the global market and to attract foreign venture capital. The 9-member board includes 5 Managing Directors from commercial banks and 4 independent directors. Currently, City Bank Managing Director Mashrur Arefin is serving as Chairman of BSIC, while Prime Bank Additional Managing Director Nazim A Chowdhury is acting as interim CEO. The board also includes Managing Directors from Prime Bank, Mutual Trust Bank, Sonali Bank, and Pubali Bank.

Under the supervision of the new Governor of Bangladesh Bank, Mostak Rahman, the process of appointing an experienced permanent CEO and Head of Investment is underway and is expected to be completed by May.

It has been learned that BSIC will not only provide financing but will also support local entrepreneurs in acquiring world-class technology and expertise through regular monitoring and strategic assistance. The fund plans to realize returns after 2029 by exiting successful startups through the stock market or direct share sales.