Earlier this year, I went to Sri Lanka to understand the startup ecosystem in the country and well, I was amazed to see the activity over there.
The activity, if you look at it from Indian startup ecosystem point of view, is still building; but what’s interesting is the quality of initiatives that’s happening in the ecosystem.
First, A Quick Context
Sri Lanka was reeling under civil war for a very long time. Almost 30 years.
Those who wanted to pursue higher education left the country to US/UK and it’s only in 2009 that things started to get back to normal.
And now, government is playing a significant role in fueling up the startup ecosystem in the country (just to share, it takes just a few days to start a company in Sri Lanka, as opposed to India).
Blue Ocean Ventures
I was invited by BOV (Blue Ocean Venture), which is an initiative of Rajan Anandan (Head of Google India and one of the most active angels in the country, also happens to be a Sri Lankan) and Prajeeth Balasubramanium who spent many years leading established businesses in UK, Japan and Australia.
Prajeeth leads BOV investments in Lanka and is also the Vice-President of The Sri Lanka-Singapore Business Council, which is part of the Ceylon Chamber of Commerce, and helps to promote bilateral trade between the two countries.
Prajeeth returned to Sri Lanka in 2002, to spearhead his family business and since then has helped several startups with funding and mentorship.
In terms of trading business, India happens to be the largest trading partner for Sri Lanka and the same, I believe will hold true for the startup ecosystem in the country. That is, cross pollination of ideas, startups and markets will lead to collaboration between startups from the two countries.
To start off, apart from travel, Sri Lanka is focusing on growing services industry (BPO/KPO) and Jeevan Gnanam, CEO of Orion Development has been playing a key role in bringing companies from other countries to Sri Lanka for BPO operations (companies like Mphasis have setup its operations in SL).
For ecosystem to grow, a lot of things have to fall in place – for example, BPOs would need a continuous supply of trained professionals and that’s when Lankan startup, Lankan BPO Academy comes into the picture. Lankan BPO Academy has raised funding from BOV (take a look at 9 Sri Lankan startups that raised funding last year) and aims to capture a significant market share in BPO training business.
What About the Product Ecosystem in Sri Lanka?
Like India, there is a lot to be done. One big challenge for Sri Lanka is the lack of an attractive domestic market. For instance, there are only 3-5 million active Internet users and that makes it difficult for local firms to think big.
Mind you, Sri Lanka boasts of lowest entry level fixed broadband charges in the world (as per ITU, 2012) as well!
Yes, the local market is still in early stage – but the same was true for India 5 years back and history tells us that those who get in early have an opportunity to reap the maximum benefit.
As of now, there isn’t any formal VC/Investor body in the country, but then proximity with India/Singapore makes up for the lack of VC interest in the country.
Now that the economy is back in track, those who are betting on new age startups will reap benefits in the coming years and that’s where BOV, I believe will play a very significant role in the coming years.
What’s NextBigWhat for Sri Lanka?
Well, first of all, Sri Lanka has a lot to learn (and NOT learn) from countries like India – i.e. how to build IT services industry body and importantly, how a IT services body can integrate with product ecosystem. Sri Lanka , on the lines of Nasscom has launched SLASSCOM which is playing a key role in development of the IT services ecosystem.
Similarly, the lateral part of the ecosystem – i.e. fine art is being taken care by entrepreneurs like Linda Speldewinde who has setup AoD (Academy of Design) that aims to provide undergraduate education in fashion. Linda is also promoting entrepreneurs (she has setup an incubator within AoD) who want to setup their own design studios and is helping them in the initial phase.
Like India, the Sri Lankan startup ecosystem is a lot about collaboration and given that SL started the IT revolution a little late, there is an opportunity to nicely mix the services and product ecosystem, for them to grow together.
Sri Lanka is growing as a startup ecosystem and it’s just a matter of time, when you will start seeing the impact on global scale. In the next few articles, I will talk about some of the very interesting startups from Sri Lanka.
Aside, if you’re from Sri Lanka and reading this, we’d love to stay engaged. Please feel free to share more about the Sri Lankan startups with the Indian Startup community.
Note: Ayubowan (in the title) means Hello in Sri Lanka.