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Funding for Bangladeshi start-ups remains sluggish as the local companies raised US$43.3 million in the first half (H1) of the calendar year.
The figure is almost half of the $91.3 million received by the local start-ups in the corresponding period of the last year (H1 2022).
The figures were revealed in a recent report prepared by LightCastle Partners, a private sector research organisation.
According to the organisations, start-ups in Bangladesh managed to secure $6.8 million through 11 deals in the second quarter of 2023 (April-June).
"This growth (funding) was largely driven by small-ticket funding from local investors, indicating the country's potential for fostering entrepreneurial growth," the report said.
Global macroeconomic shocks and external pressures are tightening financial conditions worldwide, impacting consumption and business operations, including in Bangladesh, said the report.
Soaring inflation, geopolitical stress, and global energy crisis have created shockwaves across economies leading to lower private consumption, stunted industrial production, and reduced start-up funding globally.
Regarding the Q2 funding in Bangladesh, the report said logistics & mobility sector emerged as a frontrunner, in terms of highest funding received, amounting to US$5.1 million compared to the first quarter.
"Players in the logistics industry have raised eight times the amount in Q'2, indicating a growing demand for innovative solutions to ease transportation woes," the report said.
The report recommended that the local start-ups should prioritise optimal resource management, such as recalibrating unit economics to effectively balance revenue and incurred costs.
It also said the investors and local ecosystem builders should adopt collaborative initiatives among public and private sector entities which can equip entrepreneurs with the necessary knowledge to fuel business growth.