In Dhaka’s startup community, a common sentiment suggests that the ecosystem is in decline. However, this perception may be misleading. The startup landscape in Bangladesh is not fading away but rather navigating based on outdated strategies.
Over the past decade, the trend encouraged founders to focus on the east. The typical approach involved setting up operations in Singapore, seeking accelerators in Southeast Asia, and presenting to investors in search of the next big opportunity in Asia. Fast forward to 2025, this narrative seems less compelling. The venture capital surge in Southeast Asia has cooled off, while a new hub for investment and market demand is emerging closer to home, particularly in the Gulf region, notably in Saudi Arabia.
Gone are the days of traveling to Singapore for modest funding and investing substantial resources just to secure a meeting. The wise money has shifted its direction, and Bangladeshi entrepreneurs should adapt accordingly.
The initial enthusiasm that attracted significant investments into Southeast Asia has encountered a harsh reality check. A recent report by Lightspeed highlights that despite injecting $72 billion into tech companies in Southeast Asia over the last five years, the returns have been disappointing.
The region’s leading tech companies, expected to offer clear exit options, have faced challenges. For instance, Grab’s market value has plummeted by approximately 65% post-listing, and GoTo has experienced an 86% decrease. Beneath the surface lies a fundamental problem: market breadth.
Although Southeast Asia is often compared to economic powerhouses like China and India, the actual number of affluent, high-spending households is much smaller than commonly believed. There are only about 16 million households classified as “power users” earning over $20,000 throughout the entire region. The envisioned vast middle-class demographic ready for immediate monetization has been slower to materialize.
For Bangladeshi entrepreneurs, the implication is clear. The funding opportunities are constricting. The previous mindset of prioritizing growth without regard for sustainability, as advocated by numerous accelerators, is giving way to a more stringent requirement for long-term viability, a challenge in markets with unequal purchasing power and market fragmentation.
While Southeast Asia’s enthusiasm wanes, the Middle East is experiencing a surge in investment. In 2025, startups in the MENA region amassed $7.5 billion in funding, marking a 225% increase year-over-year.
Saudi Arabia is at the forefront of this momentum. In the same year, the kingdom secured $1.72 billion in venture capital funding, a 145% surge from the previous year, with transaction volume rising by 45% to 257 deals. Notably, Saudi Arabia surpassed the UAE in deal activity for the first time, accounting for 37% of all transactions in the MENA region.
This growth is not solely fueled by local investments. International investors’ involvement in Saudi Arabia surged by 65% the previous year. There is a strong appetite for digital transformation, and unlike the diverse consumer classes in Southeast Asia, the Gulf Cooperation Council (GCC) region offers concentrated purchasing power and a swift ability to pay for quality services.
This paradigm shift is not just theoretical. A closer look at notable deals originating from Dhaka reveals an influx of capital from the Gulf region, eclipsing the traditional source from Singapore.
The merger between Bangladesh’s ShopUp and Saudi Arabia’s Sary resulted in the formation of a new entity, SILQ, in a deal exceeding $100 million. More than a mere acquisition, this deal represents a bridge connecting South Asian supply with Gulf demand.
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.
Markopolo, a B2B software-as-a-service (SAAS) startup, raised $2 million with Joa Capital, a Saudi venture capital firm, as the leading investor.
10 Minute School, a major edtech company in Bangladesh, secured $2 million in funding with Conjunction Capital from the UAE as the lead investor.
Jatri, a transportation platform, received investment from Fatima Gobi Ventures, with networks extending across Pakistan and the GCC.
These instances are not isolated occurrences. Companies like MyAlice, Zatiq, and Barikoi are gaining traction in the region. Discussions about further mergers and acquisitions linked to the GCC are underway, aiming to strengthen this connection.
While Bangladeshi entrepreneurs traditionally directed their gaze eastward, their counterparts in Pakistan viewed the Gulf as a natural extension of their domestic market and tailored their strategies accordingly. Haball ($52 million) and MedIQ ($6 million) recently secured substantial funding explicitly for expanding into Saudi Arabia, supported by regional venture capitalists. COLABS is venturing into Riyadh with local partnerships, PostEx ($7.3 million) is expanding across the GCC, and Abhi ($60 million) has forged deep ties in the UAE.
Additionally, they leveraged an asset that Bangladesh shares but under
