The global economy is increasingly driven by innovation, and at its heart are dynamic startups challenging the status quo and creating new value. For discerning investors, these nascent ventures offer not only financial returns but also the chance to shape the future.

And within this vibrant landscape, Sri Lanka – particularly through the Startup Nation initiative – is emerging as a compelling destination for smart capital.

The global startup ecosystem is a vibrant network with regions competing in innovation, funding and talent. The Global Startup Ecosystem Report 2025 (GSER 2025) highlights the rise of emerging hubs, demonstrating growth potential beyond traditional tech giants.

Sri Lanka, though a smaller player, is making notable progress.

And the 2022 Startup Genome report ranked Sri Lanka among the Top 5 Global Ecosystems and No. 2 in Asia for Affordable Talent. From July 2019 to December 2021, it generated US$ 228 million in ecosystem value with strong early stage funding and investor activity.

However, challenges remain. Many startups struggle with limited recognition, support and funding – often forcing founders to bootstrap. A lack of critical information, tough competition and inconsistent government backing add to the pressure. Yet, Sri Lankan entrepreneurs continue to display resilience and innovation.

Despite challenges, Sri Lanka boasts a pool of innovative individuals harnessing technology and creativity to address local needs and envision global solutions. At the forefront is Hatch, the country’s leading co-working space and startup incubator. Founded in 2018, Hatch has grown from 18 startups to over 700.

More than merely a space, Hatch offers a comprehensive ecosystem of accelerator programmes, workshops, mentorship and business development services. Its success is evident. Hyperglade, a blockchain and Web3 startup, secured 350,000 US Dollars from Silicon Valley investor Tim Draper.

Other ventures such as Miris by Islandmom, True by Tina and Feelo have also attracted funding. Hatch’s AccelerateHER programme in partnership with the US Department of State further empowers female founders, addressing gender inequalities in the startup ecosphere.

The country’s potential as a startup hub is undeniable. Its strategic Indian Ocean location adjacent to major markets such as India and Southeast Asia offers a strong geographical advantage.

With a young, tech savvy population and rising digital adoption, the country is primed for innovation especially in e-commerce, fintech, agri-tech and sustainable technology.

Government initiatives led by the Information and Communication Technology Agency of Sri Lanka (ICTA) and programmes including 10,000 Ideas and Spiralation aim to create a startup friendly environment.

Sri Lanka’s affordable talent also attracts startups seeking to build lean, efficient teams. Despite challenges in funding and operational costs, the country’s entrepreneurial momentum makes it a compelling place for startup growth.

Investing in startups offers the opportunity to back groundbreaking innovations and earn returns that traditional assets rarely provide. While early stage investments carry higher risk, they also hold potential for exponential growth as startups disrupt industries and scale globally.

Beyond profits, such investments drive job creation, economic growth and solutions to societal challenges. Sri Lankan startups present a unique opportunity. With a young ecosystem, valuations are often more attractive than in mature markets, increasing return potential.

The blend of strong entrepreneurial spirit, affordable talent and growing digital infrastructure creates a fertile ground for success. Supporting local ventures also boosts economic resilience and positions Sri Lanka as a rising innovation hub – especially appealing for impact investors focussed on sectors such as sustainable technology and agriculture.

Startup Nation, launched by Hatch, is a bold initiative to elevate Sri Lanka’s entrepreneurial ecosystem by fostering innovation, investment and sustainability. More than a programme, it’s a vision to shape the nation’s economy by discovering, building and funding top startups while expanding access to capital and global exposure.

As part of the initiative, Hatch is hosting a national startup competition, shortlisting 100 from over 1,000 applicants. The focus is on deep tech, B2B and B2C innovations, enterprise software and scalable solutions to national challenges. The winner will receive a US$ 100,000 funding opportunity with potential for follow-on investment.

Investing in Startup Nation is an investment in Sri Lanka’s economic future. This initiative offers a curated pipeline of high potential, revenue generating startups that have undergone rigorous vetting and incubation by Hatch.

Through Startup Nation, investors access a diverse portfolio of innovative businesses tackling key challenges and targeting emerging markets. With a focus on global scalability, these startups offer strong potential for international reach and returns. Backed by Hatch’s expertise and network, the programme offers a structured, transparent platform for impactful investment.

Beyond funding, investors can play a pivotal role in startup success by offering mentorship, strategic guidance and industry insights. They can open doors to networks; connect startups with partners, customers and other investors; and facilitate international market access.

Follow-on funding and strategic partnerships – such as pilot projects or solution integration – can further accelerate growth. For Startup Nation winners, this support is crucial in leveraging initial momentum to scale to the next level.

Investors in Startup Nation enjoy multiple benefits including high growth potential, and early access to innovative technologies and disruptive models. Startup investments diversify portfolios, and offer a chance to create meaningful economic and social impact through job creation and real world problem solving.

Early entry into Sri Lanka’s emerging ecosystem also provides a first mover advantage while potential tax incentives such as income tax holidays and capital gains relief further enhance the appeal.

Investing in Startup Nation is a chance to fuel tomorrow’s breakthroughs while shaping a vibrant, high-potential entrepreneurial ecosystem today.

– Compiled by Tamara Rebeira
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