Why are startups in Bangladesh struggling to succeed

Despite the rapid development of Bangladesh’s startup ecosystem, companies trying to establish themselves in the market are currently encountering some significant obstacles. Startups are having greater trouble raising capital in 2024 than they did in 2023. In the first three months of 2024, startup investment dropped 70% to $7 million, compared to $22 million in the last three months of 2023. Startups are finding it difficult to stay afloat in the competitive market for three key reasons. Let’s discover what the reasons are-

Startups in Bangladesh face a lack of funding

The largest challenge facing Bangladeshi businesses today is funding. At the start, businesses struggle to manage investment. Bangladesh’s foreign investors’ continued lack of enthusiasm for taking chances in the startup industry is one of the causes of this. As a result, a shortage of finance is pushing many firms into their first stage of existence.

Startup companies in funding crisis and their challenges. | Photo collected.

Intricacy of Administration

How often must we visit government buildings in our nation to complete even the most basic tasks? We need approval from roughly six to seven government organizations before we can start a restaurant. You must also wait in line at ten to twelve government organizations in Bangladesh if you want to launch an IT startup. New businesses take a long time to complete the necessary paperwork, including licensing and registration. A lot of business owners become discouraged during this challenging procedure. Therefore, the government should use digital platforms to make things easier for consumers and raise the standard of these procedures nationwide.

Startups in Crisis of Skilled Workers

There is a crucial lack of skilled workers in Bangladesh. The shortage of skilled workers is one of the main issues facing the nation’s startups. Approximately 15,000 recent graduates enter the nation’s IT industry each year, but the majority of them choose to work for established corporations rather than start-ups in search of well-paying positions. Due to the relatively low job security and other benefits offered by startups, many people are unwilling to work there. Furthermore, no company can expand without skilled workers.

The crisis and challenges of startup companies due to a lack of skilled workers. | Photo collected.

E-commerce Startups’ Present Situation

Despite being highly developed at the moment, the e-commerce industry is also facing many difficulties. In terms of survival, logistical issues, and consumers’ low spending power are two of the main issues that most e-commerce businesses face. Although some big e-commerce enterprises, like Priyo Shop, got $5 million in funding in 2024, many small businesses are still having a hard time surviving.

Prospects for the nation’s startups in the future

The government and investors need to work together with more start-up businesses to overcome the aforementioned obstacles. It is possible to generate trained staff and streamline administrative procedures by implementing training programs. It’s a significant solution. For entrepreneurs to succeed, a robust, safe, and encouraging ecosystem is required. Bangladesh’s startup industry will grow even more robust in the future with the correct funding and legislative backing.

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