Sri Lanka Startup Ecosystem in 2025: A Year of Resilience and Transformation

Posted On 27 January, 2025

Sri Lanka, often called the "Pearl of the Indian Ocean," is undergoing a remarkable transformation as its startup ecosystem evolves into a vibrant hub of innovation. Despite economic and political challenges, the country has shown resilience in fostering entrepreneurship and technological advancement. With a growing digital economy, a youthful and skilled workforce, and a strategic location bridging South Asia and Southeast Asia, Sri Lanka is emerging as a promising player in the global startup landscape. In 2024, key sectors like fintech, agritech, healthtech, and tourism tech saw notable progress, while government-backed initiatives and international collaborations fueled growth. As 2025 unfolds, Sri Lanka’s startup ecosystem stands as a beacon of resilience, creativity, and determination.

Record-Breaking Funding in 2024

Sri Lankan startups raised $250 million in 2024, marking a 40% increase from the previous year. Colombo remained the nucleus of entrepreneurial activity, while cities like Kandy, Galle, and Jaffna emerged as budding hubs for innovation in tourism tech, agritech, and logistics.

The surge in funding was driven by fintech, agritech, and tourism tech, with early-stage investments growing by 50%. Notable funding rounds included $50 million for a fintech platform focused on digital payments, $30 million for an agritech startup optimizing supply chains, and $25 million for a healthtech company leveraging telemedicine.

Government initiatives such as the Startup Sri Lanka Program, Digital Economy Strategy 2025, and partnerships with organizations like ICTA (Information and Communication Technology Agency) have been pivotal in fostering growth.

Fintech: Driving Financial Inclusion

Fintech continues to lead Sri Lanka’s startup ecosystem, raising $100 million in 2024. With a significant portion of the population underbanked, fintech startups are addressing financial gaps through mobile wallets, digital payment platforms, and micro-financing solutions.

Leading players like LankaQR, a nationwide payment system, and PayHere, a payment gateway for businesses, expanded their services. Emerging startups like iLoan, focusing on SME financing, and EZ Cash, offering mobile money solutions, gained traction. Regulatory support from the Central Bank of Sri Lanka (CBSL) and initiatives under the National Financial Inclusion Strategy have created a favorable environment for fintech innovation.

Agritech: Modernizing Agriculture for Sustainability

Agritech startups raised $60 million in 2024, leveraging technology to address challenges in food security, climate resilience, and sustainable farming practices. Agriculture remains a vital sector for Sri Lanka’s economy, employing nearly 25% of the workforce.

Notable startups like FarmFitter, which connects farmers with buyers through a digital marketplace, and AgriSense, providing data-driven crop management solutions, are transforming the sector. Emerging companies like SmartIrrigators, focusing on efficient water usage, and GreenRoots, promoting organic farming, are gaining recognition. Government programs under the National Agriculture Policy 2030 have further bolstered this sector.

Tourism Tech: Revitalizing a Key Industry

Tourism tech startups raised $50 million in 2024, leveraging digital platforms to enhance traveler experiences and promote Sri Lanka’s unique cultural and natural attractions. Tourism, a cornerstone of the economy, has seen a strong recovery post-pandemic.

Key players like TravelPass, a digital booking platform, and EcoLanka, focusing on eco-tourism, are redefining the sector. Startups like MySriLanka, integrating local experiences into travel itineraries, and TourLink, offering guided virtual tours, are gaining traction. Investments under the Sri Lanka Tourism Strategic Plan 2025 have supported the recovery and innovation in this critical sector.

Healthtech: Expanding Access to Healthcare

Healthtech startups in Sri Lanka raised $40 million in 2024, focusing on telemedicine, AI-driven diagnostics, and health management platforms. With healthcare accessibility being a key challenge in rural areas, healthtech innovation is playing a crucial role.

Startups like Doc990, a telemedicine service, and oDoc, providing virtual consultations, are reshaping healthcare delivery. Companies like MediDirect, focusing on digital health records, and PharmaXpress, an online pharmacy, are gaining recognition. Investments under the Universal Health Coverage Plan and government incentives for digital health solutions have bolstered the sector.

Green Tech: Advancing Sustainability

Green tech startups raised $30 million in 2024, focusing on renewable energy, sustainable urban development, and waste management. Sri Lanka’s commitment to renewable energy and climate resilience has spurred innovation in this sector.

Notable players like SolarIsland, specializing in solar energy solutions, and GreenCycle, focusing on sustainable waste management, are leading the way. Emerging startups like CleanSri Lanka, promoting biofuels, and EcoConstruct, offering eco-friendly building materials, are gaining traction. Government policies under the National Green Growth Strategy have supported green tech innovation.

E-Commerce and Logistics: Connecting Rural and Urban Markets

E-commerce and logistics startups in Sri Lanka raised $30 million in 2024, driven by the rapid adoption of online shopping and improvements in delivery infrastructure. With increasing internet penetration and smartphone usage, e-commerce has become a key growth driver.

Companies like Kapruka, an online marketplace, and PickMe, a logistics and delivery platform, continued to dominate the market. Emerging startups like ShopNGo, focusing on rural e-commerce, and FastTrack Logistics, providing last-mile delivery solutions, are addressing critical gaps in supply chains. Investments under the Digital Economy Blueprint have enabled rapid scaling.

Artificial Intelligence: Driving Innovation Across Sectors

AI startups in Sri Lanka raised $20 million in 2024, with applications in customer engagement, predictive analytics, and healthcare. Sri Lanka’s emphasis on STEM education and partnerships with global tech companies have bolstered its AI capabilities.

Notable startups like AIHub Lanka, specializing in business intelligence tools, and VisionAI, focusing on AI-powered analytics for agriculture, are leading the sector. Government support through the AI Development Strategy and collaborations with tech accelerators have positioned Sri Lanka as a competitive player in AI innovation.

Digital Infrastructure and Smart Cities

Sri Lanka achieved significant progress in digital infrastructure in 2024, including expanded broadband access to rural areas and the rollout of 5G networks. These developments have enabled startups to innovate in IoT, cloud computing, and smart city solutions.

Colombo and Kandy are implementing smart city initiatives focusing on AI-driven traffic management, renewable energy integration, and digital public services. Programs like Smart Lanka 2025 and investments in cybersecurity have strengthened the country’s position as a tech-driven economy.

Global Collaborations and Market Expansion

Sri Lankan startups increasingly entered international markets in 2024, with over 30 companies establishing a presence in South Asia, Europe, and North America. Initiatives like the Startup Lanka Global Program and partnerships with accelerators such as Impact Hub Colombo and Google for Startups have facilitated cross-border collaborations.

Sri Lanka’s strategic location and growing innovation ecosystem have made it an attractive destination for international investors and a launchpad for regional expansion.

Mergers and Acquisitions (M&A): Strengthening the Ecosystem

M&A activity in Sri Lanka reached new heights in 2024, with 10 deals valued at $80 million. Startups in fintech, agritech, and tourism tech were the primary targets for acquisitions by regional and global corporations.

A notable deal included the acquisition of a Sri Lankan healthtech platform by an international healthcare provider, underscoring the ecosystem’s global relevance.

Employment and Talent Development

Sri Lankan startups created over 8,000 new jobs in 2024, with high demand for professionals in fintech, AI, and healthtech. Collaborations between startups and universities, along with government programs like the Digital Talent Development Initiative, have ensured a steady pipeline of skilled talent.

Investments in digital education and upskilling programs have empowered local professionals and attracted international talent to the ecosystem.

Challenges and Opportunities

Despite its progress, Sri Lanka’s startup ecosystem faces challenges such as regulatory complexities, limited access to late-stage funding, and economic uncertainties. However, opportunities lie in leveraging its young and educated population, strategic geographic position, and burgeoning digital economy. Emerging sectors like agritech, healthtech, and green tech are poised to drive the next wave of growth.

The government’s commitment to fostering innovation, sustainability, and digital transformation will be critical in addressing these challenges and sustaining momentum in 2025.

Looking Ahead to 2025

As Sri Lanka’s startup ecosystem advances into 2025, it is poised for continued growth and recognition on the global stage. Key focus areas include scaling fintech and tourism tech solutions, advancing agritech technologies, and fostering deeper international collaborations.

With its strong commitment to digital transformation, sustainability, and entrepreneurship, Sri Lanka is well-positioned to become a leading innovation hub in South Asia and beyond.

The Sri Lankan startup ecosystem in 2025 exemplifies resilience, creativity, and transformation. By leveraging its strengths in technology, sustainability, and international collaboration, Sri Lanka is shaping its future as a leader in the global innovation landscape. Startups in the country are not only addressing local challenges but are also paving the way for a sustainable and prosperous future for South Asia and the wider world.