Tahseen Rashid, Investment Analyst at HOF Capital, recently spoke to ExitStack in an exclusive interview. HOF Capital is a global technology investment firm that leverages its global limited partner network to help founders build massive businesses. Tahseen talks about his experience as a global investor in the Bangladeshi startup ecosystem and the underlying factors which makes Bangladesh a top global investment destination over the next decade—and which Bangladeshi startups HOF Capital has already invested in.

Early Days in Bangladesh and the US

Spending the first eight years of his life in Australia, Tahseen and his family moved back to Bangladesh after the completion of his father’s Ph.D. After completing high school in Dhaka, he received a scholarship to the U.S. at Colby College. Eventually, Tahseen kicked off his career with stints at Kormo by Google, Snap, Tiger Global, and Argentina's NXTP Ventures before finally joining HOF Capital in May 2021.

Impacting Global Emerging Markets: HOF Capital’s Vision

HOF Capital was started back in early 2016 by three Egyptian best friends who understood the possibility of frontier and emerging markets. It's a multi-stage fund that operates from Pre-Seed to Series A, investing at early stages. The fund is very agnostic about the location of the investment and does not set quotas for any specific country. For them, it's about trying to find the biggest markets and industries in different countries—which eventually attracted their focus towards Bangladesh, one of the fastest growing economies of the past decade.

So far, HOF Capital has invested in two companies in Bangladesh: MyAlice and NITEX. In addition, the fund also invested in Asaak, founded by Bangladeshi-American Kaivan Sattar and operating in both Uganda and Mexico. One of HOF's main ideals is to work closely with the founders, all the way up to pre-IPO or any other exits, and support them throughout their journeys.

Challenges of the Ecosystem

From his experience of working with Bangladeshi startups, Tahseen believes that the main challenge for the ecosystem is its relatively young age. For comparison, he stated examples of countries like India, Brazil, Indonesia, and Singapore, four countries leading the way in emerging markets. In Southeast Asia, they have already had their unicorns, such as Tokopedia, Grab, Gojek, etc. These companies have given upcoming entrepreneurs both operational and educational experience, having learned from their seniors how to build a massive company, and now they are going out again to build their own. The second generation of entrepreneurs has started to come forth in these regional counterparts, while Bangladesh is still in its first generation.

"HOF Capital is always on the search for entrepreneurs that want to build a category-defining company." However, he says, their experiences have shown that most entrepreneurs are still early in terms of being able to understand the extent of the opportunity. He believes Bangladeshi entrepreneurs have to understand that capital allocation isn't specific to geography—including Bangladesh—and that there is plenty of capital to be deployed globally. The companies that seek international capital have to be of a global standard, or at least regional, standard.

Optimistic Trends Since COVID-19 Recovery

Due to the rise of the new digital normal post-COVID-19, Tahseen believes that people are now more inspired, leading to a much more exciting time for the startup ecosystem. There are a lot more people trying to build, and there's a greater appetite for risk. There are more people who understand what the word "startup" means now and the risks associated with it. People are also more aware of digital payments, Zoom, etc. "All of these have been really good tailwinds for the startup ecosystem."

Next Chapter of the Ecosystem

From a global investment perspective, Tahseen expects Bangladesh is going to be a top 20 economy over the next decade. As a result, there's a huge possibility of an open battleground for every single industry, from fish cultivation to garments and agriculture to consumer finance and real estate. He believes there could potentially be unicorns in every single industry.

Moreover, he mentions the sizable diaspora savings in the Middle East right now. In the Play Store ratings, bKash is among the top 15 apps in the consumer finance category across a lot of Middle Eastern countries. As such, there are a ton of international opportunities for Bangladeshi startups that, given the proper economic conditions, political stability, and decent working conditions, could can take the startup ecosystem to the next level on the global stage.