The Venture Capital market in Sri Lanka has been experiencing significant growth in recent years, driven by several key factors.
Customer preferences: Investors in Sri Lanka are increasingly turning to Venture Capital as a means of diversifying their portfolios and seeking higher returns. This is due to the potential for substantial capital appreciation that can be achieved through investments in high-growth startups. Additionally, Venture Capital provides investors with the opportunity to actively participate in the growth and development of innovative companies, which can be appealing for those looking to make a positive impact on the local economy.
Trends in the market: One of the key trends in the Venture Capital market in Sri Lanka is the increasing number of startups and entrepreneurial activity. The country has seen a surge in the establishment of technology-based startups, particularly in sectors such as fintech, e-commerce, and healthtech. This trend is driven by a combination of factors, including a growing pool of talented and educated entrepreneurs, favorable government policies and incentives, and an increasing appetite for innovation among consumers. Another trend in the market is the rise of angel investors and angel networks. These individuals and groups provide early-stage funding to startups, often in the form of seed capital. Angel investors play a crucial role in the ecosystem by providing not only financial support but also mentorship and guidance to entrepreneurs. The presence of active angel networks in Sri Lanka has helped to fuel the growth of the Venture Capital market by providing a pipeline of high-potential startups for larger funding rounds.
Local special circumstances: Sri Lanka's geographical location and its strategic position as a gateway to South Asia have also contributed to the development of the Venture Capital market. The country's proximity to India, which has a well-established and vibrant startup ecosystem, has facilitated cross-border investments and collaborations. This has allowed Sri Lankan startups to tap into a larger market and gain access to resources and expertise that may not be readily available locally.
Underlying macroeconomic factors: Several macroeconomic factors have played a role in the growth of the Venture Capital market in Sri Lanka. The country has experienced steady economic growth in recent years, which has created a favorable environment for entrepreneurship and investment. Additionally, the government has implemented various initiatives to support the startup ecosystem, including tax incentives, grants, and incubation programs. These measures have helped to attract both local and foreign investors to the Venture Capital market. In conclusion, the Venture Capital market in Sri Lanka is experiencing significant growth due to increasing customer preferences for diversification and higher returns, as well as the rise of startups and angel investors. The country's strategic location and favorable macroeconomic factors have also contributed to the development of the market. With continued support from the government and the presence of a vibrant startup ecosystem, the Venture Capital market in Sri Lanka is expected to continue its upward trajectory in the coming years.
Data coverage:
Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.Modeling approach / Market size:
Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.Additional notes:
The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.
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