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An equity-backed public limited company with an initial paid-up capital of Tk 4.25 billion has been formed to finance startups and facilitate promising economic ventures in the country, sources said.
Under the guidance of the Bangladesh Bank (BB), the company -- Bangladesh Start-up Investment Company PLC -- was formed a couple of days ago with contributions from 39 commercial banks to support the startup sector, which is believed to be largely unexplored mainly for a lack of funding, officials and bankers have said.
To ensure access to credit for the least-focused business areas, the central bank is facilitating the company formation process with the assistance of commercial banks, which will become shareholders of the startup venture through equity investments.
Equity investment refers to the purchase of shares or stocks in a company to become a shareholder. By owning shares, investors gain a stake in the company's assets and profits.
Sources at Bangladesh Bank said the proposed company will have authorised capital of Tk 20 billion, although it will begin operations with an initial paid-up capital of Tk 4.25 billion.
The newly formed company will have a nine-member board comprising top executives from five commercial banks and four independent directors. The board will be chaired by the Chairman of the Association of Bankers, Bangladesh (ABB) and Managing Director and CEO of City Bank PLC, Masrur Arefin.
The four other commercial banks represented on the board are Prime Bank, Mutual Trust Bank (MTB), Sonali Bank and Pubali Bank. Deputy Managing Director of Prime Bank, Nazeem A Choudhury, will serve as the CEO of the investment company.
Seeking anonymity, a BB official said the long-awaited public limited company, Bangladesh Start-up Investment Company PLC, has finally been formed with an initial fund of Tk 4.25 billion contributed by 39 commercial lenders.
He said the company received its certificate of incorporation from the Registrar of Joint Stock Companies and Firms (RJSC) on December 7. The firm now needs to obtain a trade licence from the city corporation and open a joint account to formally proceed with funding operations.
"We have asked ABB members to hold a board meeting as quickly as possible to appoint four independent directors.
We are hopeful of launching operations within this month," the central banker said.
Citing a regulatory instruction, the BB official said commercial banks are required to set aside 1.0 per cent of their net profit for startup financing, which in most cases remains unused due to various factors.
"The new company has been formed to deploy this amount in a structured and startup-friendly manner to promote promising ventures in the country," he added.
Terming the initiative timely in the current macroeconomic context, ABB Chairman Masrur Arefin said Bangladesh is stepping into the global venture capital (VC) landscape with the launch of the new VC firm.
He said the initial paid-up capital stands at Tk 4.25 billion, but the available fund could reach Tk 6.50 billion if loans from foreign banks are secured. "We are trying our best. This will open a new horizon for people with innovative business plans and ideas," he said.
Regarding the selection process, the seasoned banker said they plan to bring in foreign consultants with global VC financing experience for the investment committee to ensure proper utilisation of equity investments.
"I am very optimistic about the company. We want to see everyone receiving co-investment from this initiative. If we can help establish platforms like bKash, Pathao and Chaldal, it will be a great achievement," Mr Arefin said.
Welcoming the development, Shahir Chowdhury, founder and CEO of Shikho, said the creation of a new venture fund backed by 1.0 per cent of bank profits could mark a "seminal moment" for Bangladesh's startup ecosystem -- if the momentum is sustained.
"This is an incredibly encouraging step from BB and the country's commercial banks," Mr Chowdhury said. "It signals a real commitment to nurturing innovation and building the kind of financial architecture the ecosystem has needed for years."
He also praised the appointment of Masrur Arefin as chair of the new entity, noting Arefin's public commitment to bringing in global venture capital experts to help design an investment committee aligned with international best practices.
"Having someone at the helm who understands both the local context and the value of world-class expertise gives this initiative a strong foundation," he said.
Shahir Chowdhury added that the immediate priority should be capitalising the new company so its board can begin structuring operations with full autonomy. "If we empower the board quickly, this vehicle can become catalytic -- supporting high-growth Bangladeshi startups and helping attract meaningful foreign direct investment. That's the opportunity before us."
The participating commercial banks contributed equity funds equivalent to 1.0 per cent of their net profits. According to BB sources, startup operators aged over 21 will be eligible to receive funding in three categories: Tk 20 million, Tk 50 million and Tk 80 million.
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