Startup entrepreneurship and investment is a famously risky business. But there’s one area where founders and VCs usually avoid risk: geography.
Overwhelmingly, funded startups cluster in countries that are highly rated for ease of doing business. You rarely see them in nations known as more dangerous and difficult places for starting new ventures.
This basic notion seems obvious, but we thought it would be interesting to see if there are unexpected places where startup funding is on the rise. To do that, we took a World Bank ranking1 of the 190 best and worst countries for doing business. We then used Crunchbase data to see how countries at the bottom of the list are seeing gains in startup investment.
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Turns out, there are quite a few nations for which this is the case, as seed and venture investment reaches more parts of the globe. For simplicity’s sake, we picked four countries which have never been startup hubs but are seeing sharp growth in funding:
No. 1: Democratic Republic of Congo
We’ll start with the Congo, the largest country in sub-Saharan Africa and home to a population of around 108 million. It’s a place with a famously horrific colonial history, followed by several troubled decades under a series of strongman leaders. While vast and rich in natural resources, it’s never been an easy place to make a living or build a business.
But Congo is too big for startups to ignore entirely. Since 2021, around $10.4 million in funding has gone to known Congo-based startups listed in Crunchbase.
While Congo’s numbers might not look big, it is a jump from prior years. For the decade 2010 to 2020, for instance, Congolese companies pulled in just $1.2 million in pre-seed through venture funding, per Crunchbase.
Among the largest recent funding recipients is Altech Group, a provider of solar power and clean cookstoves. The company raised $1.5 million in equity funding, with social investor SIMA Funds as a backer, alongside $7.1 million in debt financing, per Crunchbase.
Another $37.5 million went to Jambo this year. An African “Web3 SuperApp” with Congo-born founders, the company most recently secured a $30 million May round led by crypto-focused investment firm Paradigm. (It’s unclear whether Jambo also has a presence in Congo.)
No. 2: Iraq
Iraq isn’t exactly tech startup central. From 2010 to 2020, just around $2 million in total known venture and seed funding went to Iraqi startups, according to Crunchbase data.
More recently, however, things are picking up. Since 2021, Baghdad-based startups have pulled in at least $13.7 million in equity funding, per Crunchbase. There’s even a dedicated fund, Iraq Tech Ventures, that says it focuses on “diversifying Iraq’s economy away from oil and into more sustainable sectors like technology.”
In recent quarters, the largest funding recipient is Baly, a Baghdad-based ride-hailing app that raised a $10.5 million round earlier this year. Meanwhile, Alsaree3, a food delivery startup, pulled in $3.2 million.
No. 3: Uganda
Uganda has been said to have the youngest population in the world, with an estimated 45% of its people under the age of 15. Just 2% of people in this sub-Saharan nation are 65 and older (compared to roughly 17% of Americans).
Some of that youthful energy is apparently getting channeled into startup ventures. Since 2021, at least 20 Ugandan startups have pulled in seed, venture or venture debt funding, per Crunchbase, collectively raising over $40 million. By comparison, in the whole decade from 2010 to 2020, Ugandan startups pulled in less than half that.
The biggest name is Tugende, a Kampala-based startup that offers financing and services for small business and solo operators who want to own income-generating assets such as motorcycles and cars. According to Crunchbase data, Tugende has pulled in $22 million in equity funding and $27 million in debt financing to date. The company also announced a pre-Series B of undisclosed size in June.
Telemedicine provider Rocket Health Africa also landed one of the bigger rounds, with a $5 million Series A announced in March. The Kampala-based company offers doctor consultations via smartphone, lab sample pickups and medicine delivery.
No. 4: Bangladesh
With around 170 million people, Bangladesh is the eighth-most populous country on Earth. By land mass, however, Bangladesh ranks No. 94, meaning it is also one of the world’s most densely populated nations.
Despite geographic challenges, Bangladeshis have had an industrious track record, being among the fastest-growing economies in the world over the past decade. That’s led to a sharp rise in funded startups, many of which are tooling goods and services for consumers and businesses in the domestic market, as well as export-oriented ventures.
Crunchbase lists nearly 100 seed through venture rounds for Bangladesh-based companies that have closed since last year, collectively raising over $230 million. A majority of that has gone to a single company: Dhaka-based ShopUp, a B2B commerce platform for small businesses that has raised over $200 million in venture funding. Other larger rounds are dominated by e-commerce, logistics and delivery.
Our funding survey included only rounds recorded in the Crunchbase dataset. Due to language barriers, decisions not to publicly announce a fundraise, and other reasons, other funded rounds may have occurred in the surveyed countries that did not make it into the dataset.
Illustration: Li-Anne Dias
After data irregularities on Doing Business 2018 and 2020 risk reports were reported internally in June 2020, the World Bank management paused the next report and initiated a series of reviews and audits of the report and its methodology. Due to this, Crunchbase is using the 2020 report more as a rough ranking than a precise risk tabulation.↩
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