Bangladesh’s history is closely linked to its agrarian roots, with agriculture playing a pivotal role in shaping the country’s economy. Even today, despite rapid urbanization, agriculture remains the backbone of rural livelihoods and a critical driver of national development, employing nearly 40% of the nation’s workforce. Despite its contribution to enhancing rural growth and employment, the agriculture industry continues to grapple with enduring challenges, such as low productivity, supply chain inefficiencies, and vulnerability to climate change and natural disasters.

Although agriculture employs a substantial portion of Bangladesh’s workforce, it only contributes about 11% to the total GDP since FY 2015-16. This decline can be largely attributed to a combination of slow productivity growth, limited modernization, and inadequate climate adaptability, which continue to challenge smallholder farmers as they grapple with persistent and evolving hurdles.

Where Agritech Startups Make Their Mark

In a competitive landscape where smallholder farmers continue to tackle key barriers, including limited financing, inefficient supply chains, and restricted market access, agritech startups have stepped forward to make an impact. These startups aim to introduce solutions to age-old problems, including features such as digital market access, optimized logistics, and crowdfunding platforms, to ultimately improve productivity and enhance long-term profitability. 

A major hurdle for up-and-coming startups has been the restricted access to capital. Agritech startups like iFarmer have introduced a crowdfunding model that allows investors to browse farming projects. This approach democratizes access to finance and shares the risk between both parties, making agriculture a more viable and attractive option for smallholders. Currently, iFarmer supports over 100,000 farmers with collateral-free financing to manage farm-lands and purchase machinery. In addition to finance and inputs, market access remains a significant challenge for farmers. Startups like Agroshift are making the supply chain more efficient by directly connecting farmers to markets, reducing the dependence on intermediaries, and ensuring that farmers have greater visibility of market demand, and receive fair prices for their produce.  

The collective effort of these startups to address critical issues within a traditional sector has sparked enthusiasm amongst investors. This is supported by the sector’s potential for high returns in a largely underserved market of smallholder farmers in Bangladesh.

Over the last decade, agritech startups in Bangladesh have raised a total of US$20Mn across 53 deals, representing approximately 2% of the country's overall startup funding. The majority of this funding, US$11 Mn, has been concentrated in early-stage investments, particularly in seed rounds. This trend indicates that investors are willing to take on greater risks to support startups at their foundational stages, aiming for long-term gains. In late-stage funding, Fashol secured US$1Mn in a Venture Round earlier this year, suggesting growing investor confidence in the long-term potential of agritech startups, with early-stage investments setting the stage for future market opportunities.

Paving The Way Forward: Unlocking New Heights

The progress in expanding financial access for smallholder farmers has been noteworthy, but agritech startups in Bangladesh need to prioritize sustainable growth and adaptability. It is crucial for them to build strong partnerships with industry leaders and microfinance institutions to enhance technology-driven solutions and financial access. 

Additionally, these startups need to leverage government-backed platforms and regulatory support to drive broader adoption among agri-based SMEs. For example, eNAM, a pan-India electronic trading portal introduced by the Indian government, has connected farmers directly to buyers, improving market efficiency. In Pakistan, government initiatives such as the Kisan card give rural farmers access to subsidies and short-term loans, promoting financial inclusion. By embracing public partnerships and advocating for supportive policies, agritech startups can foster innovation, improve farmer livelihoods, and accelerate the sector's growth.

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Written By: Ryaan Ahmed
Editorial Support: Ameera Fairooz