Overshadowed by its long history of civil war, and its popular neighbor, India, Sri Lanka’s value in IT has often been overlooked by the world. The country is finally in a place to not just move past survival but begin to plant seeds towards a more developed and economically stable future.
The geographic location of the country is unique in connecting the Far East and Pacific region with Europe and the Americas. The country has also managed to create Free Trade Agreements with both India and Pakistan and have created policy in favor of foreign investments. The country is continuing to rise in the list of ‘countries easy to do business with’ on the World Bank’s overall rankings.
Part of this vision, for the government, is investing in the tech and startup sectors. Recently, an extensive survey of startups across the region was completed and here are the interesting results:
The startup demographic, like most startup communities, is mostly between the ages of 20-35 and a whopping 96% are male. Over 86% having a Bachelor’s degree and 27% hold a Master’s degree. More than 65% have listed engineering or computer programming as their core skills.
Because of the lack of a startup infrastructure and investment networks, over 58% of startups were funded by personal savings while under 30% had been able to secure any outside funding and only 4% are backed by Venture funds.
While the companies may be self-funded, there is a lot of growth happening in Sri Lankan startups. Over 55% of companies say that they are in early stages or expanding stages of revenue. 14% said that they are already expanding into new markets.
Here are the major challenges of the still young Sri Lankan startup ecosystem:
- Workspace. Startups in Colombo and other Sri Lankan cities lack affordable workspaces which means that entrepreneurs often struggle to find locations with affordable and reliable internet, meeting places and community.
- Payments: There are no great options for mobile payments (like paypal) and this has made growth in many sectors very difficult. While companies do have access to payment systems like 2checkout and Moneybookers, the government restrictions on paypal make expansion of startups considerably more difficult.
- Experienced successful mentors are difficult to find in the country. For young founders seeking guidance and support, they often confer with other inexperienced founders rather than gaining insight from experienced entrepreneurs or investors.
- There is a misalignment between startups and investor interests. Investors, according to the research, are often looking for companies in transportation, healthcare and education. However, startups in the country focus on the service sector and technology.
- Regulation: Like many emerging markets government policy and regulation don’t have the kind of fluid ease with with to set up and conduct business operations and financing. This is still a huge challenge in expanding the startup community.
To address these concerns, SLASSCOM had been established to help support, educate, and brand the Sri Lankan startup ecosystem. The initiative has spend time completing the research and has made concrete plans moving forward. There is a considerable effort to start accelerators and incubators, while bringing in outside money and developing a Sri Lankan business brand. In addition, SLASSCOM plans to help facilitate the development of affordable co-working spaces and better educate people about the benefits of entrepreneurship to address their risk adverse culture.
- Spirilation seed funding support
- Venture Engine
- MIT Global Startup Labs
- Half Life
- MIT Global Connect Program
- Xceleration by Startup Sri Lanka
- Cowork by Spiralation
- Lan co-working space
- Edulink experience labs
- The HIVE of MAS
- ConceptNursery by SLIT
- Hub9 –
Angels and VCs:
- Lanka Angel Network
- Spirilation seed funding
- Idea2Fund by MTI
- Disrupt Unlimited
- Blue Ocean Ventures