In line with the recently concluded Sri Lanka Investment Forum (SLIF) 2021 organised by the BOI, the Ceylon Chamber of Commerce and Colombo Stock Exchange, the Council for Startups held a webinar on the Startup Ecosystem Landscape to attract investments via the local tech and innovation opportunities.
It was noted that in a thriving/robust startup ecosystem a good investment climate and deal flow is critical. As such, the aim of the webinar was to showcase the local tech and innovation potential and to boost the venture funding ecosystem in Sri Lanka. The panellists included Sequoia Capital Managing Director Rajan Anandan, Dialog Axiata PLC Director/Group CEO Supun Weerasinghe, Asia Securities Chairman Dumith Fernando, and Ceylon Chamber of Commerce Council for Startups Chairman Prajeeth Balasubramaniam moderating the session.
Over the past 10 years Sri Lanka on average has had venture funding of approximately $ 2.5 million per year where leading countries spend close to 0.5% of GDP per annum. This equates to $ 400 million per annum in Venture Funding for Sri Lanka. Thus, the objective during the session was to see how Sri Lanka could gradually increase this funding by at least targeting 0.1% of GDP ($ 80 m) for 2022/2023 by highlighting the following:
- Geopolitical location – Connected with over 8 trillion GDP within 5-hour flying time which makes it easier for a startups to scale.
- Untapped market – Still at an early stage with only approximately 400 startups, thus becoming attractive compared to the region for investors that are early movers.
- Tech talent – Small in numbers but proven talent that can build world class products to compete globally.
- Brain gain – Sri Lanka has been ranked second best for digital nomads in 2021 ahead of Singapore by Club Med. This study by the French travel company looked at cost of living, safety, average internet speed, presence of nature and wellness spots, as well as adventurous activities in each country. There is plenty of young Lankan talent retuning back to the country and many successful startups in Sri Lanka were founded by them. These entrepreneurs studied in the best schools globally, worked for a few years and came back. They have a world view but want to be in Lanka.
- Govt incentives and support – Tax breaks, infrastructure development focused on ICT exports, Digital ID cards, Internet for every citizen etc.
- Untapped innovation potential in last mile, Fin-Tech, Ed-tech, Health-tech, Agri-tech, etc. and startups are able to become profitable fast in a smaller test market.
It was also noted that many startups have not grown and/or have shut down due to lack of funding. Therefore, we should look at a mechanism of increasing the depth and breadth of the investor pool to boost this ecosystem. With the increased focus of the government, this new asset class can become vibrant like in other countries, increasing new employment opportunities and FDI. The discussion stressed the need to increase the funding and to create a friendly environment for the startups.
The panel highlighted the need for startup business incubator providers in Sri Lanka to be more comprehensive and support startups holistically. The panellists pointed out the importance of a proper entrepreneurial education system to transform Sri Lanka into a world class technology and innovation hub.
B2B meetings were organised to support the Sri Lankan Startups to reach out to international investors and showcase their product/service offerings and secure investments. The Council for Startups of the Ceylon Chamber of Commerce called in applications and showcased the selected startups based on the merit of their offerings to address the world problems which also had high growth potential.
The startups selected to exhibit their offerings classified by the sector were as follows;
Agriculture : SpectrifyAI, and Agrithmics
Education : Headstart, and CrowdLearn
Financial Services : Niftron, DirectPay, Thyãga E-gift Vouchers, and InsureMe
Food & Beverage : Isso Restaurants, Sozo Beverages, and OMAK Technologies
Healthcare : oDoc
Logistics : Layer 7 Innovations, and Gensoft
Marketing & Advertising : ReapDigital, and Roar Global
Retail : Stripes & Checks, and Zigzag.
The CFS-Exhibitor virtual lounge was designed to connect these startups with potential investors and it successfully connected 12 B2B meetings with investors from several countries. The feedback from the investors and startups were very positive.
The Council for Startups of the Ceylon Chamber of Commerce has been in the forefront providing numerous opportunities for startups and is an incubator aimed to provide a conductive environment for entrepreneurs and founders with access to global markets, idea validation, debt and equity finance, mentorship and skilled professionals and service providers. The Executive Committee Members of the CFS have extensive knowledge and exposure working with the Startup Ecosystem in Sri Lanka, which makes it more conducive for Startups to seek assistance from the forerunners within the startup space in Sri Lanka.
Feel free to reach the CFS Secretariat on firstname.lastname@example.org or via the hotline +94-77-022-8877 for further information.