Sri Lanka

MEMBERS:
Information and Communication Technology Agency of Sri Lanka

"Sri Lanka’s Startup Development Strategy boasts of startup-friendly policies, non-collateral based debt finance, and the development of state-of-the-art technology parks, to name a few initiatives in our holistic approach to develop the startup ecosystem and establish Sri Lanka as a hub for new technology."

Jayantha De Silva
Chairman, Information and Communication Technology Agency of Sri Lanka
Top 30 Asian Ecosystem in Funding
Top 30 Asian Emerging Ecosystem in Talent & Experience
Top 5 Global Ecosystem in Affordable Talent

Highlights

Thanks to its low cost of living, sunny weather, and natural beauty, Sri Lanka placed #2 in Club Med’s worldwide ranking of countries for digital nomads in 2021. The Sri Lankan government is building on the island’s appeal to become both a top destination for remote tech workers and an up-and-coming startup hub.


In July 2021, Sri Lanka's government approved a new Digital Nomad Visa that will allow remote workers to live and work in the country for one year. It is planned to come into effect in 2022. To further attract digital nomads, the Nomad4LK digital nomad ambassador competition was held at the AsiaBerlin Summit 2021 in Germany. The winner was provided a return air ticket to Colombo, coworking space, uninterrupted connectivity hosted by SLTMobitel, and 14 weeks of accommodation.


Startup SL, the national online platform for startups, aims to create 1,000 new startups by 2025. It offers two years free membership to startups and innovators. Sri Lanka plans to build three techno parks by 2023, in addition to two already under construction. The technopark currently being built in Galle will have 350,000 square feet for tech companies with 5G telecom facilities. In November 2021, Colombo: Hatch was awarded the Best Co-Working Space honor at the Global Startup Awards.


Notable recent deals in the ecosystem include Fintech Moneta’s $325,000 seed round in November 2021 and Blockchain startup EXIP’s initial coin offering in December 2021.

Ecosystem by the Numbers

EARLY-STAGE FUNDING
(2019H2-2021)
$12 m
GLOBAL AVG. 2023
$687 m
ECOSYSTEM VALUE
(2019H2-2021)
$228 m
GLOBAL AVG. 2023
$28.6 bn
MEDIAN SEED ROUND (2019H2-2021)
$51 k
GLOBAL AVG. 2023
$671 k
MEDIAN SERIES A ROUND (2019H2-2021)
$427 k
GLOBAL AVG. 2023
$4.7 m
SOFT. ENGINEER SALARY (2021)
$6 k
GLOBAL AVG. 2023
$46 k
60 m
GLOBAL AVG. 2023
11.3 bn
5
GLOBAL AVG. 2023
101
Amount ($)
Count (#)

Exits

(2017-2021)
EARLY-STAGE FUNDING GROWTH TIER (2018/19 VS. 2020/21)
1
Calculated on a scale of
1 (lowest) to 10 (highest)
TOTAL VC FUNDING (2017-2021)
$84 m
GLOBAL AVG. 2023
$4.5 bn
TIME TO EXIT (2017-2021)
9.4 years
GLOBAL AVG. 2023
9.4 years

Sub-Sector Strengths

Cleantech

The Sri Lankan government is aiming to become energy self-sufficient by 2030 and to increase the country’s power generation capacity from the existing 4,043 MW to 6,900 MW by 2025, with a significant increase in renewable energy. Sri Lanka has already achieved a grid connectivity of 98%, relatively high by South Asian standards.

Agtech & New Food

In 2021, ICTA Sri Lanka and enpact e.V, Germany signed a knowledge-sharing agreement encouraging technology-focused investments in the Agtech sub-sector. In January 2022, the Bill and Melinda Gates Foundation met with the Information and Communication Technology Agency of Sri Lanka to plan for the development of Farmer Data Management Systems and Digital Strategy. Smart irrigation system SenzAgro has raised $77,700 in funding over three rounds.

Reasons to Move Your Startup to Sri Lanka

Startup-Friendly Environment

In 2021, Club Med ranked Sri Lanka as the second-best destination for digital nomads, after Thailand. The government has approved a digital nomad visa program that enables foreigners to work remotely from Sri Lanka for one year. It is set to launch in 2022. The government also passed a Personal Data Protection Bill to ensure accountability for citizen data privacy and protection.

Tax Incentives

Sri Lanka offers international businesses looking to enter the country a five to ten-year tax holiday and maintains a 0% corporate tax rate for the tech sector. There are zero capital gains and zero dividend withholding tax for foreigners.

Selected Startup Organizations

Startup Genome Members

MEMBER
Information and Communication Technology Agency of Sri Lanka
Information and Communication Technology Agency (ICTA) of Sri Lanka is the apex ICT institution of the government. In terms of the Information and Communication Technology Act No. 27 of 2003, (ICT Act) as amended by Act No. 33 of 2008, ICTA has been mandated to take all necessary measures to implement the Government’s Policy and Action Plan in relation to ICT, in terms of the Section 6 of the ICT Act.
"The Information and Communication Technology Agency of Sri Lanka has collaborated with Startup Genome to uncover the vibrant Sri Lankan entrepreneurial ecosystem in the Global Startup Ecosystem Report 2022. We are excited to share that the area ranks in Affordable Talent as a Top 5 Global Ecosystem and the #2 Asian Ecosystem, making Sri Lanka an important location for international startups seeking to adapt and to develop their products for the large opportunity in the South East Asia Region."
Stephan Kuester, Head of Ecosystem Strategy of Startup Genome

Key Ecosystem Players

BOV Capital

A Sri Lanka/Singapore-based VC fund that invests in technology startups from seed stage to Series A. We focus on investing in early-stage ventures with a proven product-market fit that can demonstrate scaling.

Hatch Works Pvt Ltd

Providing startups with all the guidance and support services they might need to innovate, grow, and succeed.

John Keells X

A corporate startup accelerator and open innovation program run by John Keells Holdings PLC, Sri Lanka’s largest listed conglomerate operating in diverse industry verticals.

Lankan Angel Network

Sri Lanka’s largest network of angel investors. Founded in 2012, with the purpose of bringing together the Sri Lankan investor and mentor community and to scale the startup ecosystem.

Yarl IT Hub

Yarl IT Hub is an organization by the community for the community, focused on being a catalyst for entrepreneurship and innovation development in the Northern Province of Sri Lanka.

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