In Dhaka’s startup community, a prevailing sentiment suggests that the ecosystem is in decline, with some fearing that the situation is dire. However, this perception may be misleading. Far from being on the brink of failure, Bangladesh’s startup ecosystem is simply navigating based on outdated strategies.
In recent years, entrepreneurs were advised to focus their efforts towards the east. The conventional approach involved establishing businesses in Singapore, pursuing accelerators in Southeast Asia (SEA), and seeking investments from funds eyeing the “next Asian tiger.” However, as of 2025, this strategy appears less promising. The once-thriving venture capital landscape in Southeast Asia has cooled off, with a new hub of financial activity and market demand emerging closer to home, particularly in Saudi Arabia within the Gulf region.
The days of traveling to Singapore in hopes of securing a modest $60,000 investment and spending exorbitant amounts just to secure a meeting are diminishing. The tide has shifted, with savvy investors redirecting their focus. Bangladeshi entrepreneurs are urged to adapt to this change.
The initial optimism that propelled substantial investments into Southeast Asia has encountered a harsh reality check. A recent report by Lightspeed reveals that despite injecting $72 billion into tech enterprises across SEA over the past five years, the returns have been disappointing.
While Southeast Asia was often likened to economic powerhouses like China and India, the actual consumer base with significant purchasing power is considerably smaller than commonly thought. The region boasts merely around 16 million affluent households earning above $20,000, challenging the narrative of a vast, readily monetizable middle class.
For Bangladeshi startups, this presents a clear implication. The funding landscape is becoming more stringent. The model of prioritizing rapid growth regardless of costs, endorsed by many accelerators, is giving way to a demand for sustainable business practices. This transition is particularly challenging in markets characterized by uneven buying power and market fragmentation.
Conversely, the Middle East is witnessing a surge in startup activity. In 2025, the MENA region saw an impressive 225% year-on-year increase in startup funding, totaling $7.5 billion.
Saudi Arabia stands at the forefront of this growth trajectory. In the same year, the kingdom attracted $1.72 billion in venture capital funding, marking a 145% surge from the previous year. Deal volume also rose by 45%, with 257 transactions recorded. Notably, Saudi Arabia surpassed the UAE in deal activity for the first time, accounting for 37% of all transactions in the MENA region.
The momentum is not solely driven by domestic investments but also by a notable uptick in international investor participation, which surged by 65% in the past year. The region’s appetite for digital transformation is robust, and unlike the fragmented consumer base in Southeast Asia, the GCC offers a more consolidated purchasing power and a propensity to pay promptly for quality services.
This shift is observable in the significant deals originating from Dhaka, with an increasing influx of capital originating from the Gulf rather than Singapore.
For instance, the merger of Bangladesh’s ShopUp with Saudi Arabia’s Sary resulted in the establishment of SILQ, valued at over $100 million. This partnership not only signifies an acquisition but also symbolizes a connection bridging South Asian supply with Gulf-based demand.
Furthermore, Pathao, a prominent logistics and ride-hailing company, secured a $12 million pre-Series B funding led by VentureSouq, a fund based in the GCC.
Similarly, Markopolo, a B2B SAAS startup, raised $2 million led by Joa Capital, a Saudi venture capital firm. Additionally, 10 Minute School, a leading edtech company in Bangladesh, secured $2 million led by Conjunction Capital in the UAE.
Jatri, a transportation platform, received investments from Fatima Gobi Ventures, with extensive networks across Pakistan and the GCC. These examples are not isolated incidents, with companies like MyAlice, Zatiq, and Barikoi gaining momentum in the region, hinting at further GCC-related mergers and acquisitions that would deepen this business corridor.
While Bangladeshi entrepreneurs have historically looked towards the east, their counterparts in Pakistan have strategically viewed the Gulf as a natural extension of their market, tailoring their businesses accordingly. Companies like Haball and MedIQ secured substantial funding rounds specifically for expansion into Saudi Arabia, backed by regional venture capitalists. Businesses such as COLABS are expanding into Riyadh with local partnerships, PostEx is scaling operations across the GCC, and Abhi has established robust partnerships in the UAE.
Moreover, these companies have leveraged a strategic asset that Bangladesh shares but often underutilizes – the large expatriate communities in the Gulf. These communities serve as a practical entry point for distribution channels, recruitment, partnerships, and early customer acquisition. This advantage is challenging to replicate in the Southeast Asian market.
The notion that “Bangladesh is a lost cause” only holds weight if success is