World Bank in talks to accelerate start-up community acceptance in Sri Lanka
While Sri Lanka’s start-up ecosystem is booming and various angel investments are coming into the country, the government has three major roles to play in terms of recognising the potential for start-ups. A team from the World Bank is in discussion with the government to accelerate the start-up community acceptance.
The three main roles of the government are to create a capital structure, a limited liability partnership and an exchange control regulation.
BOV Capital Co-founder, Prajeeth Balasubramaniam elaborated on this at the Dialog Axiata’s first phase of Digital Innovation Fund (DIF) release held at Dialogs’ head office in Colombo on Thursday. Mr. Balasubramaniam said, “The Government has a massive role to play to accelerate the growth of startups in Sri Lanka. We have made many requests to recognise the potential for startups in Sri Lanka. There are three major roles the government can assist the start-up eco-system.”
Dialog together with BOV Capital has chosen three startups; roar.lk, insureme.lk and mydoctor.lk as its first phase of investment. The US$ 15 million DIF was debuted by the Malaysian Prime Minister in December 2017.
Some 30 per cent of the investment, US$ 250,000 each will be invested during the seed stage of eight startups while US$ 1 million each will be given to 10 early stage, start-ups. The investment will be made on any digital start-up that has a scope of innovation, Mr. Balasubramaniam explained while noting that small and medium enterprises are non-innovative whereas start-ups are innovative.
He also mentioned there was a gap in the funding cycle for start-ups. BOV Capital acts as an investor, fund manager and mentor. The initial screening by BOV Capital considers several factors including revenues, user traction and scalability and includes a comprehensive study of the business model. Subsequently the start-ups are approved by the investment committee of the DIF for further evaluation prior to awarding the funding.
“Worldwide, out of 10 start-ups only one will succeed. We want to make it to at least six or seven start-ups to succeed. It’s always a high risk for the funding agency but it will remain an experience for the entrepreneur,” Mr. Balasubramaniam reiterated. Dialog Axiata Group CEO, Supun Weerasinghe at the event mentioned that the purpose of the DIF is to empower Sri Lanka. “Connectivity alone will not help Sri Lanka go forward. During this funding process it’s a combination of companies that will work together,” he added.