The world’s top travel destination is brewing a sophisticated startup ecosystem in South Asia
The #EcosystemMaps in this article have been updated with the precious and enthusiastic contribution of several Sri Lankan entrepreneurs and ecosystem players after the first publication. Briter Bridges and Crowdisland have facilitated the research and data crowdsourcing.
Sri Lanka is that country that is usually featured in the headlines as the top travel destination thanks to its enviable beaches, mystical tea plantations, and unaltered wildlife. Yet, many tend to ignore that the country has long been a key talent and technology supplier for several international corporations such as Nike, eBay, Expedia, Emirates and other brands who rely on IT infrastructure developed by Sri Lankan companies.
“Sri Lanka saw a steady increase in new businesses in the technology field during the past 5 years. The support ecosystem strengthened with more access to funds, shared workspaces, mentors, markets which some were aligned to private and government-run initiatives. The exceptional talent produced through our Universities have built world-renowned products and the talent pool will further strengthen with an increasing number of foreign-affiliated Universities setting up in Sri Lanka. The next 3 years could see more startups with 4IR (Fourth Industrial Revolution) ready offerings and more startups expanding their global footprint.”
Sachindra Samararatne — Program Head, Industry Development, ICT Agency of Sri Lanka
The tech industry began to emerge in the late 90’s, explains Chalinda Abeykoon, CEO of CrowdIsland and Briter’s key partner in the production of this study. By 2009, several success stories such as the acquisition of Millennium IT by the London Stock Exchange and investment by Intel on WSO2 put Sri Lanka on the global map. Anecdotes such as these, coupled with the end of the civil war, have since contributed to fuelling an entrepreneurial renaissance in the country which has thrived off the radar. Despite its small population size, over 200 startups, hubs, and VCs were identified in this research.
Anecdotes such as these, coupled with the end of the civil war, have since contributed to fuelling an entrepreneurial renaissance in the country which has thrived off the radar.
Among the most prominent innovation-focused initiatives, Spiralation, by the ICT Agency of Sri Lanka, stands out to be the first proper in the country to provide grants of US$5,000 to encourage young inventors to commercialise their inventions. Today, programmes such as Venture Engine by LAN, HackaDev by UNDP, Imagine Cup by Microsoft and hoast of others promotes entrepreneurship and startup culture in the country. Colombo is now considered the country’s startup hub, while Jaffna is emerging as a tier 2 city thanks to the efforts of its growing community. Increasingly, smaller cities such as Kandy and Galle have begun showing signs of activity.
The Northern province is steadily making progress on entrepreneurship and innovation and, the drive factor in Jaffna is largely coming from the actors in the tech community itself, who are voluntarily acting as change agents with a desire to use technology, innovation and entrepreneurship as tools to recover,
says Balathasan Sayanthan, founding Member Yarl IT Hub.
eCommerce stands out as one of the sectors acting as a catalyst, with companies such as Anything.lk being among the forerunners in this entrepreneurial renaissance — to be then acquired by one of the largest telcos in 2015. In the last few years, FinTech has also registered fast growth, with companies such as PayHere — who processed over 30 thousand payments for a value of ca. 200,000,000 rupees in the last year — and DirectPay. In addition, players such as Hatch Accelerator and VC firm BOV Capital were actively involved in the 2018 Global Fintech Hackcelerator driven by KPMG in Singapore. Additionally, banks have also begun taking the first steps into digitising their processes.
EdTech has also seen growth recently with initiatives such as Igniter Space, a maker space where kids can access engineering and technical training and startups making it to the international arena such as Lay Up, a company that focuses on improving the eLearning experience for professionals — and which was awarded Seedstars winner in Colombo in 2017.
Transport is also an area expected to see increasing disruption: while established companies such as PickMe see upcoming competition multiply and their market share threatened by players Yogo, Taxiya, and BCon, while public transport apps such as Routemaster and Bus Booking are digitising ticketing processes. Not least, the National Transport Commission recently introduced Google Transit app across the country. An in-depth report on the startup ecosystem was published by the Sri Lanka Association of Software and Service Companies (SLASSCOM).
In conclusion, being strategically placed in relation to markets such as Pakistan, India, and Bangladesh, makes Sri Lankan startups in a position to take advantage of regional expansion. Both the private and government sector is actively promoting entrepreneurship to achieve this goal. The ecosystem is rapidly growing and was recognised in having the highest growth index in the region by GSER in 2017.
Crowdsourcing and future releases
This map and article are part of an ongoing series which aims at showcasing updates on Sri Lanka’s tech ecosystem. To allow our audience to engage with our research, we set up this form which will feed our database and permit our team to analyse and include any organisations we may have missed in this version.
Briter Bridges is building a knowledge infrastructure for data across underserved markets, i.e. where the lack of information constrains business and investment opportunities. Briter has built the largest stock of visual maps of Africa’s tech ecosystems over since fall 2018 and has now expanded its research to Asia Pacific.
Since 2016, Crowdisland has been helping promising startups who are ready to scale become investor-ready. Their unique approach has allowed startups to achieve the goals & milestones promised to investors who continue to grow both locally and regionally. You can learn more about the work they do via their website and blog.