Sri Lanka’s tech startup ecosystem is dynamic and evolving, with a $ 252 million startup ecosystem value as of 2024. 

The Sunday Morning Business spoke with multiple stakeholders in the industry to discuss the context of the ecosystem.

ICTA

Information and Communication Technology Agency (ICTA) Associate Chief Digital Economy Officer Sachindra Samararatne emphasised ICTA’s role in fostering Sri Lanka’s tech startup ecosystem. 

“While ICTA initiates activities and events, there are also community-driven initiatives supported by the agency, and together they’ve had a significant impact. Just as it takes a village to raise a child, it takes a collaborative ecosystem to enhance the Sri Lankan economy, as entrepreneurship is the engine to the economy,” he stated. 

“One of ICTA’s earliest initiatives, ‘Spiralation,’ launched in 2010, when startups weren’t common. ‘Spiralation’ was the first major initiative ICTA launched in support of local startups.”

Samararatne added: “Between 2013 and 2015, ICTA supported Sri Lanka’s first ‘Startup Weekend’ powered by Techstars, through funding and resources. Global initiatives like the ‘Global Student Entrepreneurship Awards’ and ‘Seedstars’ also entered the Sri Lankan ecosystem, bringing international exposure. 

“In 2016, ICTA launched ‘Disrupt Asia,’ Sri Lanka’s premier conference and exhibition dedicated to entrepreneurship. By 2018, the ‘Startup SL’ platform was born from within the community, signalling a turning point as it helped retain the Sri Lankan ICT industry within the country. Also, Mora Ventures, Lankan Angel Network, and Venture Engine are significant within the ecosystem.” 

“With ICTA’s support, local startups gained international exposure and market access through events such as ‘4YFN’ in Spain and ‘InnovFest’ in Singapore,” he shared. 

He added that ICTA’s role extended across the country, supporting regional hubs like the Uva Startup Hub, Central Startup Hub, Sabaragamuwa Startup Hub, and many more. In 2017, Sri Lanka’s startup landscape gained international visibility when engaging with Startup Genome, resulting in Sri Lanka’s inclusion in the Global Startup Ecosystem Report, the country’s only appearance in such a report to date.

Samararatne said: “In 2021, ICTA moved into policy-level interventions to further support the startup environment. These included the ‘Towards a Startup-Friendly Government’ report, the Alternative Credit Scoring Framework, and a startup preference policy, providing startups with improved access to Government procurement. Currently, there is significant focus on Global Entrepreneurship Week, which started in 2022 and is running for the third time this year.”

Through these various initiatives, ICTA and other ecosystem players have provided support at every stage of the entrepreneurial journey, from starting out and validating ideas to scaling up and accessing global markets.

‘Spiralation’

ICTA Programme Head and ‘Spiralation’ Founding Member Fayaz Hudah shared his insights on Sri Lanka’s tech ecosystem and the ‘Spiralation’ programme. “While Sri Lanka has people with technical talent, they are unable to create good products or even companies around such products,” he said.

He explained that in 2010, most IT companies in Sri Lanka had been IT services firms, primarily focused on trading staff time for money, and he had instead wanted to create companies that valued intellectual capital.

“At the time, certain industry leaders didn’t support the initiation of ‘Spiralation’ as they feared they would not have employees to work in their companies, trading time for money.”

Hudah highlighted the presence of business plan competitions at the time, but noted that the selection of a winner in such contests was often superficial. “They don’t go on to create much afterwards, although models like Silicon Valley were gaining traction, they were not as widespread or accepted at the time.”

He added that Sri Lanka needed a better approach, one that nurtured ideas, validated them, guided them through a maturing process, and connected them with the right people at the right time. 

This led to the founding of ‘Spiralation,’ Sri Lanka’s first technology accelerator, where he brought together more than 20 partner organisations, including global giants such as Intel, Microsoft, Oracle, IBM, and Boston University, alongside local institutions such as IIT Madras, the University of Moratuwa, the University of Colombo, Standard Chartered Bank, and the Project Management Institute.

Designed with consideration of the typical challenges startups faced, ‘Spiralation’ aimed to address these challenges from the outset. One key innovation was securing small Government projects exclusive to ‘Spiralation’ companies, helping to overcome the cash flow problems common in the product development phase.

“To my knowledge, ‘Spiralation’ remains the only grant-based acceleration programme in Sri Lanka, unlike programmes that later emerged, which are tied to corporations or others that take equity in exchange. Since this is grant-based, the criteria for acceptance are different. It’s difficult to be accepted, but once you graduate, you have the freedom to pursue your vision, which can be very rewarding,” he stated. 

The network effects and the prestige of being part of ‘Spiralation’ also proved attractive, with some applicants seeking to be involved not for the grant money but for the recognition and connections that came with the programme.

‘Startup Weekend’ and ‘Startup SL’

Speaking to The Sunday Morning Business, PayMedia and DirectPay Founder Kanishka Weeramunda shared insights on ‘Startup Weekend’ and ‘Startup SL’. 

“Around 2015, before ‘Startup Weekend,’ while there were startups, they were mostly at an uninspired stage as an industry. Isolated groups of startups were emerging, but there wasn’t a collective push,” he said.

To build a true startup culture, he emphasised, Sri Lanka needed inspiration and unity among stakeholders, including startups, investors, tech media companies, banks, and early adopters.

“We began this journey with ‘Disrupt Asia’ in 2016, and alongside it, we aimed to create ideas at the grassroots level. Ideation was a new concept for Sri Lanka. To introduce early-stage engagement with the startup ecosystem, in partnership with Techstars, ‘Startup Weekend’ was initiated as an early-stage programme that introduces people to the startup ecosystem.

He added that through ‘Techstars Startup Weekend,’ they had activated ground-level initiatives for pitching ideas and forming teams to create startups. While conceptually promising, the venture faced practical challenges due to the market’s lack of maturity and the teams that formed didn’t always stay together. “However, despite these issues, we made an impact with support from different parties, including ICTA,” he said.

This momentum led to the creation of Sri Lanka’s first inspirational startup conference, ‘Disrupt Asia’. “We developed a structured programme to guide the startup journey, from ideation to incubation and acceleration, ultimately aiming to establish fully formed startups.”

In relation to ‘Startup SL,’ Weeramunda recognised the need for a standardised system in the industry, as startups had previously relied on various ad hoc incubation and acceleration programmes. 

“We launched ‘Startup SL’ as a platform where all startups, programme providers, incubators, and accelerators could register. This platform provides a clear map of the industry, showing active accelerators, founders, and startups. Today, about 800 startups are registered, with Amazon Web Services (AWS) providing free credits and other support.

“‘Startup SL’ has also become a lobby group for the startup industry, supporting the growth and sustainability of the startup ecosystem in Sri Lanka,” he said.

‘Disrupt Asia’

‘Disrupt Asia’ Founding Member Ahamed Nishadh Najeem stated that ‘Disrupt Asia’ had been started in 2016 as a small conference for startups, specifically focusing on technology, and looking to create knowledge-sharing and networking gathering.

“Initially, we thought it would be a small event, but it quickly grew. At the first event, there were conferences, networking, exhibitions, workshops, and competitions. People from the current ecosystem came together and there was nothing like this at that time. The response was overwhelming, as all the stakeholders wanted to take part,” he added. 

“At the second event, it was expanded, positioning it as a startup and innovation festival to bring innovation, involve universities, and get more people engaged.”

He added that by the third year, ‘Disrupt Asia’ had grown internationally, with participation from around 10 or 12 countries, including international participants, conference attendees, and foreign speakers.

“The ecosystem was growing rapidly, with more people entering the startup scene and many programmes emerging for startup-related initiatives. There was a real need for people to come together annually to see what’s happening, exchange knowledge, and network, and it had a significant impact,” he said.

Yarl IT Hub

Speaking to The Sunday Morning Business, Yarl IT Hub Founding Member Balathasan Sayanthan explained that the organisation had been established 14 years ago with the goal of acting as a catalyst for building an innovation ecosystem in the Northern Province.

“It is an organisation by the community, for the community, and plays a central role in fostering growth and development in the region. Yarl IT Hub operates at three key levels, engaging with school children, young adults, and entrepreneurs. Through various initiatives, it inspires and facilitates ideas of entrepreneurship, technology, and innovation.”

Sayanthan added: “For the past seven years, Yarl IT Hub has been running a coding school, offering full scholarships to young adults who lack access to higher education. This programme provides an invaluable opportunity for these individuals to enter the tech industry as interns. 

“To date, more than 800 graduates have joined the workforce, contributing to the growth of the local tech ecosystem. Today, the hub supports over 75 companies founded by alumni of its entrepreneurship programmes, a testament to its impact on the region’s startup ecosystem.”

Uva Startup Hub

Uva Startup Hub Founder Kalinga Gunawardhana added that the hub had been initiated in 2016 with the goal of addressing the economic isolation of the Uva Province, beyond its main industries like tourism and agriculture.

“The core idea was to create more value in the region through technology. The hub comprises several companies, including my own, that bring in foreign revenue to the country and we also have the support of the diaspora. Our goal is to improve the regional economy.

“We are a collective of individuals and companies coming together to establish a vision for the region. Most of the startups in the area were founded with this vision in mind and I believe we have also inspired many of them. While there are challenges in the region, human capacity is present, and by leveraging technology, we aim to generate more revenue both for the region and for the country as a whole,” he said.

Lanka Angel Network

Speaking to The Sunday Morning Business, BOV Capital Managing Partner Prajeeth Balasubramaniam shared insights on the Lanka Angel Network’s (LAN) role in the tech startup ecosystem. As an investment network, LAN mainly focuses on strategic fund growth, global partnership expansion, awareness, and impact. 

“When we started in 2009, we took inspiration from an Indian network to create our own and initially brought together a handful of people, especially six patrons, who played a crucial role in supporting the initiative. Over the years, we’ve grown significantly, bringing in new people, and we’ve managed to generate over Rs. 2 billion worth of funding through our own resources,” he said.

Reflecting on the regional ecosystem, Balasubramaniam highlighted the importance of Government support, as the ecosystems around the region had flourished due to their governments providing support. Unfortunately, Sri Lanka has not received the same level of backing. Despite the challenges, Balasubramaniam added that there was hope with the appointment of a digital advisor.

“In the 10-15 years that we’ve been developing the ecosystem, we’ve connected with other angel networks globally and helped startups expand beyond Sri Lanka.

“From a startup and investment perspective, there are still significant barriers for investors coming to Sri Lanka. Similarly, startups face difficulties expanding beyond Sri Lanka. These barriers hinder both local startups and investors,” he said.

Balasubramaniam also stressed the importance of funding. “A major reason startups struggle to scale is the lack of funding. Sri Lanka, as a small country, has the potential to put itself on the map. But without the right support, it’s challenging to capitalise on opportunities outside the country,” he added.

Mora Ventures

Speaking to The Sunday Morning Business, Technologically Re-Awakening a Culture of Excellence (TRACE) Executive Director Heminda Jayaweera shared insights into Mora Ventures and its role in nurturing Sri Lanka’s startup ecosystem.

“We started this programme as a flagship initiative, with the aim to encourage Moratuwa undergraduates to explore startup opportunities. Over time, Mora Ventures evolved into a more structured and long-term model, with involvement from ICTA and broader direction. Mora Ventures was open to all regardless of experience, with the goal of fostering early-stage ideas.

“The response was promising and we provided training on idea development, marketing concepts, design thinking, and fine-tuning their business models. Industry figures, including startup co-founders, were brought in to inspire and guide participants. 

“The launch of Mora Ventures 2.0 expanded eligibility to students from other universities and even a few non-university-based startups, making it a national programme, focusing on more advanced stages like prototyping and financial planning. It included sessions on HR, legal aspects, and other key startup skills led by corporate-sector experts,” he said.

Jayaweera added that the programme had gained further momentum in its third round in early 2018, attracting some foreign startups, with Mora Ventures continuing to run subsequent cohorts, progressing into more advanced areas like deep tech.

“Later, ICTA got involved and used the Mora Ventures model in other universities, expanding it to nearly all Government and private institutions. From 2019 to 2020, I was involved in Venture Frontier Lanka, implementing similar initiatives across 22 universities nationwide as well,” he said.

With significant impact, to date, Mora Ventures has supported approximately 60-70 startups and stands as more than just an incubator as it helps expand the startup ecosystem in Sri Lanka.