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Starting up: Where does Sri Lanka stand?

4 years ago

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By Kanishka Weeramunda Sri Lanka’s start-up ecosystem continues to excite due to its remarkable growth. The term “start-up” is being used with increasing frequency. With the technological advancements spreading like wild fire across the globe, it is inevitable that the trend would reach Sri Lankan shores. There are more start-ups, more hubs, more events, more support from the public and private sector, and more investors. As the tech sector continues to grow at a rapid pace, it gives us a fascinating glimpse into the future; leading to tech start-ups becoming the driving force behind the economic growth of our nation. While Silicon Valley, Beijing, Tel Aviv, Stockholm, Los Angeles, New York, and Shanghai remain the top ranked start-up ecosystems in the world, Singapore and Bangalore are not far behind. As Sri Lanka is quite new to the industry, the country cannot be ranked as a whole. Statistics show that there are approximately 400 active tech start-ups in Sri Lanka. However, projections show an increase in the number of active start-ups in the foreseeable future, as the country has a growing pool of technical talent and young entrepreneurs building on previous success stories of global start-ups. Nevertheless, determining the state of one country’s start-up ecosystem is difficult as it cannot be compared to another country’s start-up ecosystem, as each country will have its unique set of resources and circumstances. Shared spaces Due to the significant growth in start-ups over the recent years, there is a notable increase in infrastructure and space in Colombo. The MAS Innovation Centre – colloquially called The Hive – houses entrepreneurs and experts to foster innovation. Similarly, Hatch, an incubation and acceleration platform, has a co-working office space designed exclusively for start-ups to collaborate, create and grow. Furthermore, addressing the need for space is Business Hubs (also called Entrepreneurs’ Hub) who opened five hubs in the span of 12 months across Colombo in order to cater to the demand. The main attributing factor to this was 32% of the population has access to the internet, while the country now has a mobile penetration of 131%, with the accessibility of smartphones growing rapidly. This is taken as a market opportunity for many start-ups to establish themselves, and supply to the unseen market demands in Sri Lanka. The money to start However, for a start-up to be established, a young entrepreneur would require funding and other resources. Many private and government organisations have been founded to resolve this situation. To name a few, organisations such as SLASSCOM and Lankan Angel Network look at creating ways for young entrepreneurs with newly founded start-ups; to have access to finance, provide networking contacts, and workshops on pitching and relevant tips. Simultaneously, a government funded start-up accelerator named “Spiralation” led by ICT Agency has provided grants and other resources for start-ups to develop themselves into profiteering and successful corporations for the last nine years. Furthermore, foreign start-up initiatives such as SeedStars and the Oslo Innovation Week continue to provide an opportunity for start-ups in Sri Lanka in order to experience foreign start-up ecosystems, and raise funds. Moreover, the Government has been increasingly active in introducing more start-up friendly policies, led by the ICT Agency and the Sri Lankan Export Development Board. In particular, the Government has introduced 200% capital allowances for business making investments in the Northern Province, and 100% for Eastern Province Investors. In 2016, the EDB implemented a budget proposal on start-up funding, where 26 start-ups were recommended by a committee appointed by the EDB for concessionary loans provided by state banks. Moreover, ICTA and EDB assist start-ups to gain exposure, and network with ICT industry at the local ICT exhibition “INFOTEL 2018” organised by Federation of Information Technology Industry Sri Lanka (FITIS). Similarly, there are multiple corporate accelerators such as John Keells X Innovation and Hemas Slingshot Battle, where large corporates hold competitions to select the best start-up in its early development stage to nurture and grow. To define corporate accelerators further, it is a type of seed accelerator sponsored by established and reputed companies. Community initiatives Then there are community initiatives such as “Start-up Meet-ups”, “Hackathons”, “Startup Weekends” and other various competitions, which are held throughout the year across the nation in order to provide knowledge sharing and distribution of resources. Start-up Weekends A famous community initiative in Sri Lanka is “Start-up Weekend”. Start-up Weekend is a 54 hour weekend event where a group of young entrepreneurial minds, investors, start-up mentors, marketing minds, developers, graphic designers and others get into various groups to pitch a business idea. These groups will then go head to head to create an idea, build a prototype, and pitch their solution to a panel of judges. This concept is to help nurture skills, and set a path for young minds on how they could find resources, sustain their ideas, and turn it into a profiteering company. Sri Lanka has had many notable Start-up Weekends which took place in Colombo, Negombo, Jaffna, Trincomalee, Hikkaduwa, Vanni, Batticaloa, and Kandy. Hackathons Another well-known community initiative is “Hackathons”. Hackathons are events where computer programmers work intensively on software projects with the goal of creating a functioning product or service by the end of the event. Start-ups such as Mogo, Square Mobile, Yamu are all innovative start-ups that came up via Hackathons. Some of the most renowned Hackathons that take place in Sri Lanka are: · Google I/O Extended Hackathons · Angel Hack Sri Lanka · WSO2 Hackathon · SpiralationHackathon · Women’s Hackathon · Hackathons by University of Moratuwa Other community initiatives such as “Spike Colombo” that takes place during the final Tuesday of every month and Google I/O Extended are meet-ups which help spread knowledge, and offer tips in building the start-up as well as the IT industry. Moreover, competitions such as NBQSA held by the British Computer Society, National Schools’ Software Competition by CSSL, and e-Swabhimani as well as Disrupt Asia ed by ICTA are initiatives used to bring recognition to active start-up companies and other related tech companies. In conclusion, even though Sri Lanka may not have a ranking within the best start-up ecosystems, it is quite evident that the new industry has a vast potential into becoming a major start-up hub in the foreseeable future due to its viable and sustainable environment. Join me to explore all matters relating to start-ups, entrepreneurship and innovation in Sri Lanka in this column every fortnight. Kanishka Weeramunda is the Founder/CEO of PayMedia, and Entrepreneur in Residence at Square Hub. He was recognised as the ICT Leader of the Year 2018 at the ICT Awards organised by the Computer Society of Sri Lanka (CSSL), and Best CEO of the Year as well as Best Future Leader of the Year in the Small and Medium service sector category at the CMI Excellence Awards 2017.