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Supporting Entrepreneurship in Sri Lanka: Interview with CEO of Hatch, Mevan Peiris

  • Writer: Trekking for Alpha
    Trekking for Alpha
  • Mar 4
  • 6 min read

Large posters of disruptors, innovators, and investors fill the open office space within a grand colonial building in a historic neighborhood of downtown Colombo. Inside the building, there is a vibrant buzz. It is full to the brim with young entrepreneurs despite it being the evening before an important Buddhist holiday. The atmosphere inside Hatch, an innovation hub / co-working space, is distinct and electric.

We sat down with Hatch's CEO, Mevan Peiris, to understand how he and his team are supporting Sri Lanka's young entrepreneurs. Prior to taking the reins at Hatch, Mevan served in key positions at home-grown startups in Sri Lanka giving him a unique perspective on what makes a business succeed.

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What traits make Sri Lanka the right place for a strong tech ecosystem?

There are multiple factors, the most important of which is talent and human capital. Sri Lanka has a high literacy rate compared to other South Asian nations. In addition to literacy, people have a decent command of English and Sri Lankans demonstrate strong ability in STEM fields (although this should continually improve). There is free education up until university as well. 

Sri Lanka is home to many tech adjacent industries including a large hospitality and service industry - this leads to employees with a higher customer service standard.

The cost of innovation is cheaper in Sri Lanka. It is cheaper to try out new technology. Its possible to sandbox an idea in Sri Lanka – to test before scaling.

How has the startup industry in Sri Lanka evolved both pre- and post-Hatch’s founding?

Prior to Hatch's founding, various initiatives laid the groundwork for the Sri Lankan tech ecosystem - SLASSCOM was formed in 2008 as the National body for IT & BPO companies. We also had initiatives such as the Lankan Angel Network formed in 2012. Startup community events such as SPIKE are happening regularly and the Government agency - Information Communication Technology Agency (ICTA) is expanding their mandate to include supporting startups.

Hatch was then founded in 2018 by Jeevan Gnanam, Brindha Selvadurai, and Nathan Sivaganathan and was initially conceived of as a place where entrepreneurs could come together through using the Hatch space for coworking, events, etc.

Hatch began program development during COVID and this was a significant step for the organisation. Hatch now has 6 simultaneous accelerator / incubator programs.

Startups / VC in Sri Lanka is still a fairly nascent space, but a lot of startups have come through Hatch. We've seen at least 700 companies pass through Hatch’s various offerings for startups in the last 6 years

One thing that has yet to happen in Sri Lanka's investment ecosystem is diaspora interest in companies based in country. What we see quite frequently are companies that started in Sri Lanka that then register their offices in Singapore, US, Europe or the UAE to get investment and scale.

A recent success story from the tech ecosystem (albeit not a startup) is WSO2 - which managed to make a $800 million exit. The majority of the company’s talent is based in Sri Lanka, but their HQ is registered in the US. Same for previous success stories such as Virtusa, which was founded in Sri Lanka, but was quickly moved to Boston and was valued at $2 billion at the time of their exit. We feel there is room in the future for Sri Lankan-based startups to get backed while being in the country if we unlock funding avenues through Sri Lankan diaspora as well as other VCs.

One of many co-working spaces inside Hatch in downtown Colombo
One of many co-working spaces inside Hatch in downtown Colombo

What are some success stories from Hatch which you would like to highlight? How did Hatch support these companies and where do you see them going?

There have been many examples, but a few of my favourites are below.

Hyperglade is block chain startup. Hatch hosted US venture capitalist Tim Draper at our offices in Colombo where he hosted his own pitch competition and met the Hyperglade team working in our office. He immediately made a seed investment in Hyperglade. This sort of interaction - where a founder can have a casual, but impactful in-person interaction with an investor - can happen in other markets (Silicon Valley, etc.), but its not common in Sri Lanka. Outcomes like this are very exciting and it’s why Hatch exists. This interaction / investment led Hyperglade to doing a road show in the states and now they are gearing up for their next round of investment.

Hyperglade's office space inside Hatch
Hyperglade's office space inside Hatch

Miris Hot Sauce is a company that found support through our Female Founder Accelerator (AccelerateHer). The founder started making sauce in her kitchen, she signed up for a Hatch boot camp, set up the company, and ultimately was able to pitch to investors in the US and Singapore. Its exciting for us to help female-founded SMEs grow.

Where do you see opportunities in the startup ecosystem in Sri Lanka?

The agritech sector is a big opportunity for Sri Lanka. Sri Lanka has the land space. Additionally, 30 – 35% of the population is engaged in agriculture, while the sector only contributes 8% to GDP due to inefficiencies. This makes Sri Lanka a great place to sandbox companies in this sector. For example, new technology is being developed in nearby Singapore, but they don’t have land to test and develop the product. There could be a link for testing new technology in Sri Lanka.

Additionally, companies are repositioning to be closer to India given the size of its consumer market and the growth rate. Sri Lanka is right off the coast and offers access into that market.

There is also a huge, successful Sri Lankan diaspora - many of whom are located in large cities such as Toronto, London, Melbourne etc. who relocated after the civil war that are involved in so many industries. Many have built connections in South India and built really successful companies there, but also are looking to support companies in Sri Lanka.

Testing devices for a tea-focused startup working at Hatch
Testing devices for a tea-focused startup working at Hatch

Where do you hope to see Hatch in five years? 

In many countries, the government is very involved in developing and supporting the innovation ecosystem. For example, the UK pushes the tech ecosystem ahead through academic initiatives. In Canada, there are accelerators, as well as state and city budgets for ecosystem building.

The government in Sri Lanka is focused on addressing macro issues. Hatch is focused on filling this void - we are focused on ecosystem building. Hatch has a huge role to play in fostering a vibrant and successful startup ecosystem here.

First off, there is demand for coworking space to provide a base for small businesses to meet and collaborate. People want this to exist here and that's what we provide. We currently fill 800 seats in our main building in Colombo and we just got another building with 200 more seats that will open end of Q1 2025.

This is part of a bigger vision - we want to create Sri Lanka's first innovation district in the heart of Colombo.

Beyond the coworking space, we are focused on impact based programming. We have moved beyond workshops and mentoring to focusing on the outcomes and success of the startups  

What broader impact do you hope Hatch has on the Sri Lankan economy?

We know that Hatch is setting a new tone for the youth in Sri Lanka. Hatch is creating a mindset shift for people in the country even outside of Colombo. It might be hard to capture in numbers, but its tangible. We are very focused on supporting female founders and engaging entrepreneurs from all parts of the country, and are excited about the impact these programs will have.

How can people get exposure to the companies you are supporting? How can foreigners engage with and invest in the Sri Lanka startup ecosystem?

You can follow us on LinkedIn / Facebook / Instagram. Reaching out through these channels is the best way to initially engage.

There is also an opportunity for people to mentor our founders in the Hatch community. The majority of our mentors are based overseas.

Can you give us your thoughts on the macro outlook for Sri Lanka? Since we visited your offices, there has been an election amongst other significant changes.

I am very optimistic after the recent developments in the political landscape. One pain point of the country has been corruption. Following the civil war, there was a lot of investment interest in Sri Lanka given ~30 years of limited investment. A lot of the money that flowed in was mismanaged. The new government has claimed that they want to be focused on anti-corruption measures. There is a positive trend toward good governance and transparency in Sri Lanka.

In the near future, credit ratings should continue to improve bringing more institutional investment given progress with restructuring.

All of this progress is also leading me to be very optimistic about the impact that 3 million Sri Lankans outside the country could have on our development and future. I sense that there is a feeling of positivity and willingness to re-engage in the country from the Sri Lankan diaspora and believe that could lead to others re-engaging in Sri Lanka as well.

 


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