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HERCapital by Hatch: Pioneering gender smart funding in Sri Lanka



1st row from left: Zara Mandviwalla Akbarally - Barrister-at-law, Hayley Evans - CEO of Surge Global, Sonia Dandona Hirdaramani - Personal Investor (ex-Morgan Stanley), Shehara Jayawardana - Joint Managing Director of McLarens Group of Companies 2nd row from left: Niloo Jayatilake - CEO/Director of Softlogic Invest, Nathan Sivagananathan - Co-founder of Hatch, Brindha Selvadurai-Gnanam - Co-founder/Director of Hatch

Gender disparity within the entrepreneurial world is a globally prevalent problem, often stemming from the underrepresentation of women in the labour force and leadership positions. This imbalance in diversity is mainly seen in markets with no gender-smart funding, which makes gender a key component in their program.

The lack of gender diversity at the firm level and the unavailability of gender-smart support structures are persistent hurdles faced by women entrepreneurs throughout the region.

Globally, the finance gap between women-led MSMEs (Micro, Small, and Medium Enterprises) and those led by men have shown to be a whopping $ 1.2 trillion. This can be attributed to the significant underrepresentation of women among investment decision-makers at private equity (PE) and venture capital (VC) firms, board representation, and leadership positions.

Moreover, research into the South Asian market has shown that as of 2019, only 45% of firms have a strategy to improve gender diversity in emerging markets, leading to female participation in ownership only being 18%, with only 9.3% of women holding board positions and only 9% of PE and VC funding going into female-led companies; leaving these companies underfunded.

Sri Lanka is no different from the rest of the region, with the lack of an investment ecosystem for female entrepreneurs, leading to only 25% of the country’s entrepreneurs being women, despite women representing majority of the population, accounting for 52%.

Seeing this lack of diversity and the need for a gender-smart funds, Hatch has now introduced HERCapital, Sri Lanka’s first-ever gender-smart funding scheme. The goal of the scheme is to create a better ecosystem for local women entrepreneurs and help increase gender diversity in PE/VC pipelines.

The basis of the scheme will take a strategic approach to investing in entrepreneurs, by taking into consideration gender-based factors throughout the investment process, to advance gender equality and better inform investment decisions.

Such schemes can be seen growing in popularity, with 58.6% of international fund managers choosing to invest through a gender lens. A similar trend was also seen in Asia, with 70% of the active investment vehicles established after 2017, being done through a gender lens.

Hatch’s HERCapital fund aims to pioneer a similar gender-smart funding scheme in Sri Lanka and will empower early-stage startups through a well-structured program that includes mentorship and financial support. The fund will address existing gender inequalities through investment and support more women-led businesses while continuing to champion equal representation within the start-ups funded.

The fund’s gender balance comes from the adoption of practices such as gender analysis, gender due diligence, deal origination, deal structuring, etc, which help promote a more gender-balanced fund.

From the concept to scaling through commercialization, the fund will empower early-stage startups through a well-structured program that includes both mentorship and financial support.

These entrepreneurs will be offered seed funding of USD 25,000 per startup for 5%-20% equity, alongside other benefits such as a 12-week structured program with trainings and workshops, an opportunity to pitch to local and regional VC’s, one-on-one mentoring with dedicated mentors, connections to global accelerator platforms, and free access to Hatch co-working space.

HerCapital is set to have 2 cohorts per year and 10 startups per cohort, with an estimated fund size of USD 1 million, out of which USD 500K will be allocated for seed funding and the other USD 500K for follow-on funding respectively.

The fund will also focus on encouraging disruptive innovations in products, technology, and business models in several areas. These include Agriculture, Education, Health, Energy, Sustainability, IoT, Payment, SaaS, Digital, and MarketPlace.

Based on available market data, HerCapital is expected to increase step-up valuation for companies by 1.64 times, per year in valuation by 5.5%, and profitability by 15%.

The fund has also brought on six industry disruptors to back it as its investment committee, five of whom are women entrepreneurs themselves. They include Sonia Dandona Hirdaramani, Personal Investor (ex-Morgan Stanley), Hayley Evans, CEO of Surge Global, Shehara Jayawardana, the Joint Managing Director of the McLarens Group of Companies, Niloo Jayatilake, the CEO/Director of Softlogic Invest, Zara Mandviwalla Akbarally, Barrister-at-law, and Hatch’s very own Co-founder/Director, Brindha Selvadurai-Gnanam.

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Seylan Bank takes the lead to promote LANKA QR beyond Western Province



Seylan Bank, the Bank with a Heart, organized the ‘Seylan Pay QR Carnival’ in Kurunegala to promote the LANKAQR programme introduced by the Central Bank of Sri Lanka (CBSL) to strengthen digital transactions in Sri Lanka. The special programme, focusing on encouraging local merchants and SMEs to join the national QR transaction system, took place at the Vehera Sports Ground in Kurunegala recently. Officials from the Central bank of Sri Lanka, the Lanka QR Committee and partner banks were present at the event.

Organised as the 14th leg of the LankaQR national rollout campaign, the Seylan Pay QR Carnival set a firm footprint with the highest number of merchants at the event. Seylan Bank alone on boarded over 100 merchants for the SeylanPay payment solutions from the Kurunegala area. Over a thousand customers walked in during the event which benefitted many merchants accepting LankaQR, to process transactions on the day and generate great traction in the district since then.

As the key feature of the event, Seylan Bank educated their customers on the use of the Bank’s QR payment system, the SeylanPay Mobile App, and assisted customers in making payments to merchants. Over 50 stalls selling clothes and accessories, gift items, food, sweets, electronics and electrical equipment, plants, beauty care, cosmetic items and automobile parts were set up for the benefit of consumers, with attractive added discounts for customers using QR payment systems to purchase items, thereby encouraging and familiarizing the use of it among them. This marked a record high number of merchants participating among many LankaQR nationwide rollout campaigns that were organised to date. A Seylan Bank Mobile ATM was deployed at the premises, ensuring that customers had easy access to carry out cash withdrawals if required and check their account balances at any given time. In addition, a special fun zone was set up for children at the event premises, whilst a musical evening entertained the adults present at the Seylan Pay QR Carnival.

“Seylan Bank’s commitment to develop the banking and finance network together with the industry led to us hosting the 14th leg of the Lanka QR national rollout campaign. We also realize the potential this system brings to the SME sector in the country, in terms of transaction efficiency and savings. As a bank that has continued to support SMEs in the country in a wide spectrum, the alliance with Lanka QR helps in developing the entire transaction ecosystem of the country,” commented Chaminda Senewiratne, Head of Digital Banking Channels, Seylan Bank.

The Central Bank of Sri Lanka introduced the LANKAQR service in October 2020 with the aim of moving towards a cash-less society while increasing financial inclusion in Sri Lanka, and was supported in this endeavour by Banks, licensed financial institutions and Lanka Clear (Pvt.) Ltd. It has already stood out as an attractive option with notable benefits for small and medium enterprises.

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Stylish Garments unveils its latest export-oriented BOI factory in Ambalangoda 



With the Board of Investment (BOI) widening its projects, Stylish Garments (Pvt) Ltd, unveiled its sixth BOI approved factory in Ambalangoda which manufactures children’s wear, jerseys including school uniforms exclusively targeting the international market. The Stylish Garments is a renowned a garment manufacturer and exporter of jersey knit and lighter woven apparel products.

The latest project, which is a USD 3.5 million investment, is to generate 500 employment opportunities for people living in the south and other parts of the country. Moreover, the products are slated to be exported to the UK and Europe. The agreement in this regard was signed recently at the BOI Head Office in the presence of BOI Director General Renuka M Weerakone.

The Director General said “A project of this nature should be recognized owing to the fact that it depicts the vibrant and vivid expansion of BOI projects, which has now started to reach the rural areas, The new venture will uplift the livelihood of the people living in the Ambalangoda area plus become a crucial source of bringing dollars to the country in a situation where the country isin dire need of dollars,” she underscored.

Founder and incumbent Chairman of the Stylish Garments (Pvt) Ltd Leelaratne Hattanarachchi said,” we were determined to launch the project irrespective of current challenges because such new projects would bring dollars to the country. That’s the very reason why I ventured to start operations at this new factory by turning the advantage of this crisis to ourselves. At the same time, we do appreciate the support rendered by the BOI at this critical juncture and look forward their support in future too.”

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Browns Investments solar power plant deal dominates CSE trading



By Hiran H. Senewiratne

CSE’s leading listed company, Browns Investments, disposed of 50.1 per cent of its stake in Sagasolar Power Power (Private) Limited to another leading company, Aitken Spence Pvt. Ltd. yesterday, market sources said.

The total value of the company was Rs 1.4 billion and under this deal Browns Investments sold the stake for Rs 700 million. The capacity of the solar power plant is 10 megawatts, stock market analysts said.

Sagasolar Power built the solar PV facility on 45 acres (18.2 ha) of land within a dedicated energy development area in Baruthankanda, Hambantota district, Southern province. The country’s previous largest solar plant is a 1.3-MW facility also located in Hambantota.

Amid those developments, the trading activities in the stock market turned negative due to macro and micro economic uncertainties. Accordingly, stocks slipped over 1 per cent at mid-day trade yesterday for the third consecutive day, market analysis said.

The All- Share Price Index fell by 121 points and S and P SL20 went down by 50.8 points. Turnover stood at Rs 982 million without any crossings. Top seven companies that that contributed to the turnover were, Lanka IOC Rs 274 million (3.5 million shares traded), Expolanka Holdings Rs 185 million (1.2 million shares traded), JKH Rs 77 million (626,000 shares traded), LOLC Finance Rs 59.8 million (9.9 million shares traded), Browns Investments Rs 58.9 million (8.9 million shares traded), LOLC Holdings Rs 32.6 million (89,000 shares traded) and Commercial Bank Rs 15.4 million (309,000 shares traded). During the day 51.5 million share volumes changed hands in 14000 share transactions.

Yesterday the Central Bank announced US dollar buying rate was Rs 356.04 and the selling price Rs 367.33.

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