Council for Start-ups: Supporting start-ups to attract investments

In line with the recently concluded Sri Lanka Investment Forum (SLIF) 2021 oganised by the BOI, The Ceylon Chamber of Commerce (CCC)and Colombo Stock Exchange, the Council for Start-ups held a webinar on the Start-up Ecosystem Landscape to attract investments via the local Tech and Innovation opportunities.

It was noted that in a thriving /robust start-up 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 Rajan Anandan, Managing Director, Sequoia Capital; Supun Weerasinghe, Director/Group CEO, Dialog Axiata PLC; Dumith Fernando, Chairman, Asia Securities; and Prajeeth Balasubramaniam, Chairman, Council for Start-ups of The Ceylon Chamber of Commerce moderating the session, the CCC said in a media release.

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 million) for 2022/2023 by highlighting the following:

1. Geopolitical location - Connected with over 8 trillion GDP within 5-hour flying time which makes it easier for start-ups to scale.
2. Untapped market – Still at an early stage with only approximately 400 start-ups, thus becoming attractive compared to the region for investors that are early movers.
3. Tech talent – Small in numbers but proven talent that can build world class products to compete globally.
4. 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 returning to the country and many successful start-ups 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 Sri Lanka.
5. Govt. incentives and support – Tax breaks, infrastructure development focused on ICT exports, Digital ID cards, Internet for every citizen etc.
6. Untapped innovation potential in last mile, Fin-Tech, Ed-tech, Health-tech, Agri-tech etc and start-ups are able to become profitable fast in a smaller test market.

“It was also noted that many start-ups 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 start-ups. The panel highlighted the need for start-up business incubator providers in Sri Lanka to be more comprehensive and support start-ups 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,” the release said.

B2B meetings were organised to support the Sri Lankan Start-ups to reach out to international investors and showcase their product/service offerings and secure investments.  The Council for Start-ups 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.