Startup Sri Lanka: Why Bootstrap First Is the Way Forward for Accelerators

The Accelerator Conundrum is a multipart series that challenges the prevailing wisdom of the tech startup ecosystem that entrepreneurs should Blitzscale out of the gate. Written by Sramana Mitra, the Founder and CEO of One Million by One Million (1Mby1M), the world’s first global virtual accelerator, it emphatically argues that a better strategy is to Bootstrap First, Raise Money Later, focus on customers, revenues and profits. 1Mby1M’s mission is to help a Million entrepreneurs reach a million dollars in annual revenue and beyond. Sramana’s Digital Mind AI Mentor virtually mentors entrepreneurs around the world in 57 languages. Try it out!

Sri Lanka’s startup ecosystem has been developing steadily over the past decade. With a population of 22 million, a well-educated workforce, and a strategic geographic position between India and Southeast Asia, the country has a strong foundation for entrepreneurship.

However, like many emerging ecosystems, Sri Lanka faces significant challenges:

• Limited domestic market size
• Scarcity of venture capital
• Political instability and economic volatility
• Brain drain, with talented youth seeking opportunities abroad

These realities make Silicon Valley’s blitzscaling model unrealistic for most Sri Lankan entrepreneurs. Venture capital-driven, high-burn-rate growth strategies are not suited to a small market with limited funding infrastructure.

Why Bootstrap First

The Bootstrap First, Raise Money Later philosophy is highly relevant for Sri Lanka.

• It allows founders to start small, focusing on paying customers and profitability before seeking outside capital.
• Startups can retain full control and equity, avoiding pressure to scale prematurely or exit early.
• It encourages sustainable growth, vital in a country where macroeconomic conditions can shift rapidly.

For instance, many Sri Lankan startups in sectors like edtech, healthtech, tourism tech, and BPO services can reach meaningful revenue milestones without heavy upfront capital.

The Role of 1Mby1M

This is where 1Mby1M’s Virtual Accelerator comes in:

• A fully online, global program that entrepreneurs can access from anywhere in Sri Lanka.
• No-equity model, ensuring founders keep 100% ownership.
• Structured curriculum and mentorship focused on bootstrapping methodology.
• The Digital AI Mentor, available 24/7, bridges the accessibility gap, providing guidance whenever founders need it.

While Sri Lanka has promising local programs, most are cohort-based, time-bound, and urban-centered. 1Mby1M offers continuous, borderless access, empowering founders across the island to grow their businesses sustainably.

Mapping the Local Accelerator Landscape

Sri Lanka’s startup scene has evolved significantly over the past decade, with multiple organizations supporting entrepreneurs through training, funding, and mentorship. Here are the most prominent players:

1. Hatch Works

• Type: Co-working space and innovation hub in Colombo
• Programs: HatchX FinTech Accelerator, Hatch Global Impact Accelerator (with UNDP)
• Strengths: Strong focus on fintech and impact-driven startups; high-quality mentorship
• Challenges: Primarily Colombo-centric, limited ongoing support post-program

2. Lankan Angel Network (LAN) and Angel Fund

• Role: Network of angel investors providing capital and mentorship
• Programs: Funding rounds and workshops for early-stage startups
• Challenges: Limited pool of investors; high competition for funding

3. ICTA (Information and Communication Technology Agency of Sri Lanka)

• Initiatives: Spiralation Startup Incubator, government-backed grants for tech startups
• Strengths: Public sector support and ecosystem building
• Challenges: Bureaucratic delays, program sustainability issues

4. SLASSCOM

• Focus: IT/BPO industry development
• Programs: Entrepreneurship forums, startup bootcamps
• Role: Connecting startups to corporate innovation initiatives

5. International Collaborations

• UNDP, ADB, and GIZ have supported various innovation challenges and entrepreneurship programs aimed at youth and women.

Sri Lanka’s ecosystem is clustered around Colombo and a few urban hubs, leaving rural entrepreneurs largely underserved. Most accelerators focus on cohort-based, early-stage programs rather than long-term scalability.

Pros and Cons of Local Accelerators

While Sri Lanka’s accelerators and incubators have helped catalyze a growing entrepreneurial culture, there are structural limitations preventing them from driving large-scale impact.

Program	Strengths	Weaknesses
Hatch Works (HatchX, Global Impact Accelerator)	High-quality mentorship; strong focus on fintech and impact-driven ventures; global partnerships	Limited reach beyond Colombo; cohort-based, time-bound
Lankan Angel Network & Angel Fund	Provides much-needed early-stage funding; experienced mentors	Small investor pool; not enough to fund a large pipeline of startups
ICTA (Spiralation, grants)	Government-backed initiatives; funding support	Bureaucratic challenges; inconsistent program continuity
SLASSCOM	Strong corporate network; connects startups to BPO/IT sectors	Focused mainly on tech; lacks deep acceleration processes
International NGOs (UNDP, ADB, GIZ)	Bring global expertise and funding; support women/youth entrepreneurship	Projects are short-lived; lack of continuity

Systemic Challenges

1. Geographic Concentration
   Most programs are in Colombo, leaving rural areas like Jaffna, Kandy, and Galle underserved.
2. Cohort-Based Limitations
   Programs run for fixed durations, after which founders are left without long-term support.
3. Equity Pressure
   Many funding mechanisms require equity, which can push founders into premature dilution.
4. Scaling Gap
   Startups receive support at the idea stage but lack guidance for scaling regionally or globally.

The result? Many startups show early promise but fail to mature into sustainable businesses. In Part 2, we will discuss how 1Mby1M can uniquely address these gaps and the road ahead for acceleration.

One Million by One Million (1Mby1M) is the first global virtual accelerator in the world, founded in 2010 by Silicon Valley serial Entrepreneur Sramana Mitra. It offers a fully online entrepreneurship incubation, acceleration and education resource for solo entrepreneurs and bootstrapped founders working on tech and tech-enabled services ventures. 1Mby1M does not charge equity, offers an AI Mentor in 57 languages, and offers a distinct advantage over other accelerators including Y Combinator.

This segment is a part in the series : Startup Sri Lanka