The Worst Startup Sector in Bangladesh is Agriculture—and It's Limiting Growth

Not counting iFarmer, Bangladeshi agriculture startups have raised less than US$250,000… ever. In contrast, Indian agriculture startups have raised over US$2.5 billion.

Considering the difference in the two countries' value-added agricultural output ($41 billion for Bangladesh vs. India's $480 billion) is 11.7x, the gulf in startup fundraising is absurd.

Across the 200 plus startups we actively track at Anchorless Bangladesh, agriculture has arguably the single most disappointing sector. Why? Because we know the talent to solve many of the industry's issues are within our borders, and we know the capital to support them is out there—yet we're not finding companies that are ready to put up a fight.

Some thoughts on the lack of quality agriculture startups

1. Bangladesh has a lot of brilliant academic talent that studies in fields relevant to agriculture. However, instead of staying local and founding/working at a startup, they often opt to leave the country. Those who do want to stay aren't guided or given access to resources and mentorship that allow them to turn their agri-friendly ideas into a venture investment-friendly startup. For example, a Singaporean startup raised US$12.6 million to produce cell-based shrimp, a product that likely could be created by Bangladeshi talent were they given the right resources and capital.
2. An excess of developmental capital in the agriculture space creates inefficient markets where capital isn't always held accountable. This includes grants and other methods of funding often given to "feel good" stories that do not have scalable, structural impact. This is a trend across the country, though agriculture is one of the sectors where we see it more visibly.
3. Of the few agriculture startups we've seen, many have an issue where they try to do too much. This stems from a misunderstanding of how startups work, and how investors look at such companies. Instead of solving one core problem, doing it well and scaling it fast so that the company can raise another round to take on the next step of the solution, they try to do all at once and most of it not well. This is another issue across all industries in Bangladesh, and especially rings true in agriculture: Focus on one product-based solution that scales before trying to solve for everything.
4. A common excuse in agriculture bottlenecks is "lack of infrastructure"—though just like healthcare, logistics or other large-scale industries in need of widescale disruption, every problem must start with a solution in order to bring forth other solutions. If there is a bottleneck directly ahead of a proposed solution, why not solve for the bottleneck?
5. Another common excuse is farmer illiteracy—but then explain how other countries (including India where there is a lower literacy rate at that level) are making it work just fine? That usually indicates that the founder hasn't built a product for their market. For the right founder, it's not a problem—it's an opportunity.
6. "This solution won't fix much." Sure, but everyone has to start somewhere. If 10 different startups tackle 10 different solutions, all of them can come together and collaborate to solve even larger problems afterward. Ecosystems aren't developed overnight, and nobody changes a multi-billion dollar industry by thinking about short-term results. The beauty of startups is the ability to try, fail and pivot when presented with new information.
7. The biggest problem with agriculture founders that we've met with so far, however, is that they lack a sense of urgency. As venture investors, we need to get the feeling that founders are itching to fly, that they want to take the capital and build at a global standard and pace that'll change the way we all live. As of now, we don't get that sense from local agriculture founders. For most, these solutions come across a "nice to have" or a lifestyle business they run on the side. What we need to see are founders who wake up in the morning with a mission to have structural, scalable impact in agriculture. We don't care about your awards or business competitions. We care that you have a goal in mind, and you will deploy global capital in an intelligent and aggressive manner to solve large-scale problems. We need to sense that desire from the moment we meet you.

The truth is that we don't always have to go about reinventing the wheel via metaverses, blockchain or AI to have significant, positive impact in Bangladesh. It can start small as long as the mindset to think big is always present. Agriculture is too important to Bangladesh for it to be ignored from the venture investment side—so, who's going to step up and build something venture-fundable?

Before proposing a pathway to building such startups, it’s important to acknowledge that those already working in the field are often essential to these solutions. High quality startups should, in fact, make their work more efficient and effective.

A collaborative solution with stakeholders

I challenge universities, foreign embassies and relevant developmental organizations to set up a nationwide incubation program to identify key agricultural issues, guide and mentor the founders and incubate their ideas so they can become venture-fundable. The overarching goal of such an incubator would be to get founders to think practically and value execution at scale over "feel good" stories or awards.

The most important result of such a program would be to prepare founders to be able to walk into any meeting with a VC, whether in Singapore or New York, and raise funding.

Why does venture funding matter? It will allow founders to test new solutions using capital that's willing to take risk. And those who show results will get funded further to innovate more aggressively, thereby positively changing the agricultural and socioeconomic landscape of Bangladesh. Solutions must be both scalable and structural.

Remember: It's not about what percentage of the pie you own—it's about doubling and tripling the size of the pie itself.

After all, there is no #UnstoppableBangladesh without agriculture.