In a bid to expand entrepreneurship in Sri Lanka, Hatch has launched the Startup Nation initiative to identify, support, and fund early-stage ventures nationwide. Under the programme, Hatch will run a national startup competition, shortlisting the top 100 MVP startups from over 1,000 expected applicants. The most viable revenue-generating startup will be eligible for a funding opportunity of $100,000, with potential for follow-on investment.
According to Jeevan Gnanam, angel investor and co-founder of Hatch, Startup Nation is structured to address persistent gaps in funding and market access. It brings regional investors into the pipeline while supporting startups to validate locally and scale internationally. The long-term objective, Gnanam said in a recent interview with Echelon, is to build a functional ecosystem that enables deal flow, attracts local risk capital, and connects Sri Lankan startups to larger external markets. Excerpts of the interview follow:
What is Startup Nation? And what are you setting out to achieve?
The financial crisis was the spark that ignited Startup Nation. Hatch became more than a workspace; we became a lifeline for startups facing panic and uncertainty. Amid darkness and disruption, we stayed open, offered support, and kept belief alive. At full capacity, we provided startups with access, hope, and a community.
Our rallying cry, “From Troubled Nation to Startup Nation,” emerged post-crisis, capturing a resilient spirit: Sri Lanka had nothing to lose and everything to build. Embracing the startup mindset, fall, rise, repeat, we positioned the country as a haven for entrepreneurs. Now, that vision is turning into a national movement, and this is just the beginning
How will Startup Nation address the two main challenges you’ve identified for startups: funding and market access?
We’re addressing both sides of the startup equation. On the investor side, we’re bringing in over 50 regional investors from Singapore, the US, Australia, and more to connect and invest. On the startup side, we’re going nationwide, aiming to receive 1,000 applications to identify the top 10 high-potential ventures. Through the Hatch Fund, we’ll invest Rs100,000 in one of the top five. And we’re actively working to bring in additional funds to invest alongside us. Startup Nation bridges the funding gap for startups and the deal flow gap for investors, creating real opportunities on both ends.
Could you elaborate on market access?
Most startups begin with a limited perspective, often tech-first, without a deep understanding of the problem they’re solving. The key is to focus on real customer pain points and use tech as a solution, not the starting point. While founders work through this, they need time, resources, and mentorship. Tools like ChatGPT help speed up the process, but validation still takes time. Market access is critical.
Hatch, now headquartered in Singapore and expanding to Sharjah and Bangladesh, connects startups to local and global challenges through partners in government and industry. Our FinTech accelerator, for example, operates across Sri Lanka, Singapore, and the US, providing startups with the opportunity to scale beyond borders through real-world experiences.
You mentioned you’re planning to bring in around 50 potential investors. Why would global investors be interested in looking at early-stage startups in Sri Lanka?
I think it’s because we’re showcasing Sri Lanka as a market ripe with opportunity. India has already taken off, but when you look at Sri Lanka in the context of India, Bangladesh, and Pakistan, we offer access to a combined market of around 2 billion people. Here, investors can get in early. You have access to the right technology and top talent. If you invest now, you’re tapping into that huge market potential as it opens up.
What we’re doing is telling the story of Sri Lanka as a startup hub and gateway to South Asia. This positioning is even more relevant today. For instance, India and Pakistan don’t have direct business ties, but both do engage with Sri Lanka. That makes Sri Lanka a neutral, strategic hub, a place where startups from across the region can collaborate and grow together.
With Sri Lanka being a small and distant market, concerns about bandwidth and relevance are real. So, how do you address those concerns and make the case?
Globally, Sri Lanka is perceived as a risky market, but that perception shifts when investors visit and become familiar with the ecosystem. We also mitigate investment risk by structuring them through entities in Singapore or Dubai. Additionally, building in Sri Lanka is significantly more cost-effective than in places like Singapore, providing startups with a longer runway and enhancing potential investor returns.
The concept of doing more with less is something Sri Lanka truly understands, which is why we call ourselves a Startup Nation. It fits perfectly into the investor thesis. If you explain it that way, do more with less, build from Sri Lanka, and gain access to a two billion-person market, it becomes a very compelling opportunity to get started.
Is Sri Lanka’s resilience or the resilience of these startups something you can showcase?
Absolutely. We have some great case studies. Founders are coming from remote parts of Sri Lanka, travelling two hours every day just to work at Hatch and be part of the ecosystem. And now, many of these startups are valued at $2 to $3 million. Where else can you find such an opportunity for growth? That’s precisely what Hatch has become: a beacon for startups and entrepreneurs.
The range of problems Sri Lankan startups could solve is vast. However, if we aim to build something in Sri Lanka that can scale and later expand globally, should we focus on specific areas that align with the country’s unique strengths?
Looking at Sri Lanka’s current landscape, not to say we’re limited by it, but the most immediate opportunities seem to lie in agri-tech and blue-tech. Food security is a global challenge, and Sri Lanka possesses the talent and natural resources to make a significant impact in this area.
We have plenty of underutilised land, and agri-tech can help us maximise its potential. Similarly, blue tech, or ocean technology, is another promising area, given our island geography. I believe these sectors are where Sri Lanka can realistically build competitive advantages and scale solutions globally.
With sectors like agri-tech and bluetech, are they too far removed from AI’s influence, or can AI be effectively integrated into these solutions?
AI alone can’t be a differentiator. But AI applied to agri-tech and ocean tech can make a real difference. If Sri Lanka can seed and nurture startups more effectively than any other country in these areas, that would be a significant advantage. Over the past eight years, my journey with AI has yielded significant progress, from the growth in AI graduates to the development of innovative products locally.
I’m bullish on the talent we have here. If we harness it the right way, Sri Lanka has a strong future in AI-driven innovation. That’s precisely what we’re trying to do with Hatch: harness this talent to build the next generation of companies, the future John Keells or Hemas – global success stories that emerge from Sri Lanka.
When examining the ecosystem and focusing on addressing funding and market access challenges, what gaps do you currently identify?
To put the scale of the funding problem into perspective, a healthy economy typically allocates about 5% of its GDP to funding startups. For Sri Lanka, with a roughly $90 billion economy, that would mean around $3 to $4 billion in startup funding. In contrast, we’re currently seeing only about $12 to $14 million invested in tech overall, which is just about 0.0014% of GDP. This highlights the significant funding gap, particularly in sectors such as health tech and technology in general.
We’re simply not investing enough as a country. That’s why many startups end up settling in places like Singapore; they need the funding and market access to scale to the next level. Countries like Singapore and India have established robust ecosystems to support this, although the Indian market remains India-centric mainly. We also need to connect with those ecosystems. Currently, the primary sources of funding for Sri Lankan startups are capital hubs such as Dubai and Singapore.
Why is it that startups can only raise seed or pre-seed funding here and then have to look outside for later rounds? Is this something that can be solved, or have you discovered a way around it?
More practical steps are underway. We have a fund and are working with BOE Capital to encourage local institutional investors and families to start investing in risk capital for startups. It’s still early days, but if people are willing to take bets on startups, we want to do it together. At the same time, our fund in Singapore can co-seed investments, helping to reduce risk for local institutional families while bringing in capital from abroad. Through these two mechanisms, we’re trying to address the funding gap.
We need to build stronger networks. Additionally, people need to recognise that the future lies in startups and innovation. Currently, many still prefer real-world assets; they want something tangible that they can touch and feel, so they view startups as risky. That mindset needs to change, but I’m not sure where we currently stand in terms of making that shift.
When discussing potential investors outside Sri Lanka, what returns can they realistically expect or aim for when investing in globally scalable startups?
For example, in generative AI, revenue multiples typically range from 30 to 50 times. More broadly, AI companies typically command multiples of around 15 times their revenue. That’s why I believe the more examples we show them, the better they’ll understand. There have been some cases in Sri Lanka that have existed at strong revenue multiples. We just need more success stories. The more examples people see, the more they’ll grasp what’s really happening.
Can you share some examples?
PickMe is the poster child right now. They went through some tough times, but Ajit Gunewardene took a considerable risk when no one else was making bets of that size. He has managed to build a publicly listed company in Sri Lanka on a significant scale. This is an excellent example of a startup that has succeeded, and I believe we have numerous success stories within our ecosystem. Now, it’s time to roll up our sleeves and start building.
You’re aiming for a thousand applicants from across the country. In terms of regions, which areas are likely to produce the most applicants? Innovation often happens at the fringes. Sri Lanka itself is on the fringe, and within the country, places like Jaffna and Galle are likely to produce some really interesting ideas. The next tech-based company to go public will likely identify a problem, solve it, and begin scaling, and it could come from one of these regions. We should support that.
Where do you envision Startup Nation going as an idea and concept?
True success is seeing these startups grow globally, not just for Hatch, but for Sri Lanka as a whole. It takes a community to support them, and we need to rally around the top 10 to help them scale their operations. I hope that they become shining examples of what’s possible and inspire the country forward.