CSE wasn’t let down by foreign investors
Foreign investors will take a call on their Colombo investments by the end of this quarter, a top investor and analyst says.
Almost no one (foreigners) really pulled out at the initial stages of the bloody terror attack in April, reminisces Insaaf Mohideen, a Sri Lankan born American entrepreneur and investor who has had a highly successful career over the past 25 years spanning across finance, management consulting, technology and entrepreneurship, to the Business Times in an interview in Colombo.
Mr. Insaaf Mohideen.
He is currently the Chief Investment Officer for one of the largest International Sovereign Funds managing a multibillion dollar tech fund and the Founding President of Pro Health, a healthcare company based in California. Additionally, he has invested and advised 100+ Silicon Valley startups spanning across Fin-Tech, social media, cloud compute, big data and machine learning.
He said that while there was no major exodus at the time, in foreign investment, value buyers jumped in. This typically happens when there is a black swan incident, which occurence deviates beyond what is normally expected of a situation and is extremely difficult to predict such as the Easter Sunday attack in Colombo and the suburbs. “Black swan events are typically random and unexpected and such incidents are managed by funds.” He said foreign investors will assess this situation for about two more months. “There will be a wait and see period to see if it is systemic or a random act. In the last quarter they’ll take a call.”
He noted that Sri Lanka was just starting to see maturity (in the market) after certain structural changes. “If we can have the situation under control by having a stabilised political climate, things would start moving.” He said the tumultuous political climate along with the currency being hit last year and the dilution of democracy seen last October had weighed down on general investor sentiments.
Mr. Mohideen has mentored and/or seed funded over 200 start-ups in the past 21 years. These investments have spanned across some of the biggest successes and failures in dotcom, social media, big data, financial technology and more recently alternate currencies. He noted that incubator-ready facilities and the financial stability are in the country for the most part for starting incubators in Sri Lanka. “We are trying to set up an incubator and a top businessman is really interested. The biggest challenge is that we are told that overall there’s disinterest and that it is difficult to bring people together. Now we realised that many have lost faith in the political system and the government structure, etc.” But he is very hopeful that something can be done. He added that with accolades such as being the best destination spot for travel, cuisine, and foreign investments the country was on a good ride. “Hopefully the events of the past month are just a road bump that we will get past quickly. But we have significant challenges in navigating strategically past the chaos of communal strife compounded by corruption, chaos, lack of accountability, and most importantly the lack of leadership.”
He added that Sri Lanka has a comparatively large English-speaking population as opposed to the countries in central Asia, Qatar, Latin America that that he has worked in and set up start-up incubators in. “We see Sri Lankan start-ups blossom but they just wither or become stagnant after some point.” The main drawback, according to him is that Sri Lankan entrepreneurs must realise that Sri Lanka is not big enough to scale their products. “They shouldn’t think about Sri Lanka centric products only. They must think bigger – globalised ideas. We certainly understand the trends etc. Why are we limiting ourselves?”