Affected by the gravest economic crisis in the country’s history, Sri Lankan tech startups have been snared into a vicious cycle which is difficult to escape. Startups need funding to scale up and grow their businesses beyond Sri Lanka’s borders but struggle to do so because access to capital is often insufficient and scarce locally. Those that reach out to investors globally find that few investors have the appetite or are willing to stomach the risks and uncertainty because of the country’s current circumstances.
Although a relatively small nation, Sri Lanka is known for its skilled workforce, especially in the information technology sector. The country’s tech industry has grown in leaps and bounds, rapidly becoming one of Sri Lanka’s most valuable sources of foreign revenue, and startups have a valuable space in this ecosystem. Entrepreneurs create startups to develop innovative products through technology to solve real-life problems and potentially become global products such as Uber and Spotify.
Sri Lanka’s startup space has proven its strength and resilience, braving multiple waves of adversity, including the ongoing economic crisis, yet unfortunately, struggle with procuring funding because of the poor image Sri Lanka has in the eyes of the international community.
Jeevan Gnanam, Co-Founder of Hatch, Sri Lanka’s largest Co-Working, Incubator and Accelerator space for startups, aims to change that in his ‘Sri Lanka: From Troubled Nation to Startup Nation’ initiative. “I wanted to create a platform for Sri Lanka to connect to the rest of the world. We want to be known as the number one destination in South Asia to connect with startups. I have a lot of hope for the country to reposition itself in the region as a rising startup destination,” he shared.
Dubbing Sri Lanka as the “Switzerland of South Asia,” Gnanam illustrated the country’s strategic advantage as a nation with good diplomatic relations with the entire South Asian region and a geographically centralized location. “We could easily become a hub that connects startups in the entire region,” he added.
Billionaire Silicon Valley investor Tim Draper shares similar sentiments. “The opportunity for a country like this is vast,” he expressed. “Sri Lanka is well positioned, it could become an amazing country, and it’s probably going to achieve that through building amazing technologies. Groups like the Draper Startup House and Hatch help, creating a better environment for people to come and innovate.”
Draper has landed in the island capital to mark the opening of a collaboration between Hatch and the Draper Startup House that will establish a co-living space, the first of its kind that focuses primarily on digital nomads. Jeevan envisions this initiative will benefit both the tourism and tech startup spaces as digital nomads collaborate and work with local startups and founders, sharing technology and expertise while travelling and supporting the tourism industry.
The collaboration between Hatch and Draper Startup House will support changing the international community’s perception of Sri Lanka as a troubled nation into a startup destination that attracts foreign investors. Gnanam firmly believes that the resilience of Sri Lanka’s startups is proof of their potential to be the future businesses of Sri Lanka, creating solutions for problems in the local market and producing global products, creating opportunities from challenges – local talent working with a global mindset. “Even though we are small, small can be beautiful. Sri Lanka is a great market to build your product. Talent is available and easily priced, and you can easily connect with the rest of South Asia. Larger companies have been doing this in Sri Lanka, and we have to do it for startups too.”