Venture Capital Firms in Sri Lanka

Blue Ocean Ventures (BOV) and Lanka Ventures Limited (LVL) are two of the most prominent venture capital firms in Sri Lanka, each playing a significant role in the country’s investment landscape. Both firms focus on providing funding and strategic support to entrepreneurs and businesses, particularly in the early stages of their development. However, despite their shared goal of supporting innovation and business growth, they differ in their investment strategies, target sectors, and the level of involvement they offer to the companies they invest in.

Blue Ocean Ventures (BOV), a Sri Lankan-based, Board of Investment (BOI) approved seed-stage venture capital fund, specializes in providing early-stage funding to innovative startups with high growth potential. Established with the vision of supporting the next generation of entrepreneurs in Sri Lanka, BOV seeks to invest seed capital in promising new companies that can drive innovation across various sectors. The firm’s unique approach centers on fostering local talent and nurturing nascent businesses, giving them the resources they need to scale and succeed. The founding partners of BOV bring significant expertise from their experiences in building startups and running large companies in the United States, Australia, and Asia. This international exposure equips BOV with a broader perspective on global market trends, allowing it to help Sri Lankan startups compete on the global stage.

One of the key strengths of Blue Ocean Ventures is its deep understanding of the challenges and opportunities in early-stage investing. By providing more than just financial capital, BOV plays an active role in mentoring entrepreneurs, offering strategic guidance, and helping businesses navigate the complex process of scaling up. The firm has a keen interest in sectors such as technology, digital media, and e-commerce, which are rapidly growing in Sri Lanka and other parts of Asia. Through its investments, BOV has contributed to the development of numerous startups that have gone on to achieve significant growth and recognition in both local and international markets.

In contrast, Lanka Ventures Limited (LVL), founded in 1992, is one of Sri Lanka’s oldest and most established venture capital companies. It was originally incorporated with shareholders that included prominent organizations such as the Asian Development Bank, John Keells Holdings, Forbes & Walker Limited, and DFCC Bank. This strong institutional backing has allowed LVL to take a more diversified approach to its investments, targeting a wide range of sectors in both the private and public spheres. LVL’s investment portfolio spans various industries, including manufacturing, services, agriculture, infrastructure, and, more recently, energy. Over the years, LVL has developed a reputation for its strategic investments in both early-stage and growth-stage companies.

One of the major milestones in LVL’s history was the listing of its shares on the Colombo Stock Exchange (CSE) in 1995, which marked the firm’s entry into the public market and further bolstered its financial standing. This listing allowed LVL to raise additional capital from the public and enhance its ability to support a broader range of investments. LVL’s investment philosophy emphasizes providing growth capital to businesses that have the potential to generate significant returns, particularly in sectors that are critical to Sri Lanka’s economic development.

In June 2006, LVL further expanded its portfolio by establishing the LVL Energy Fund (Private) Limited (LEF), a subsidiary dedicated to channeling investments in the energy sector. This strategic move allowed LVL to tap into the rapidly expanding energy market in Sri Lanka and the broader South Asian region, where demand for energy is rising steadily. Through LEF, LVL has been able to invest in a range of energy-related projects, including renewable energy ventures, which align with the global shift toward cleaner and more sustainable energy solutions. This expansion into the energy sector demonstrates LVL’s commitment to diversifying its investments and adapting to emerging trends in the global market.

While Blue Ocean Ventures is primarily focused on seed-stage investments in innovative startups, Lanka Ventures has a broader investment mandate that includes both early-stage and growth-stage businesses. This distinction is a key differentiator between the two firms. BOV’s focus on seed-stage investments allows it to take a more hands-on approach with entrepreneurs, providing them with the resources and support they need to bring their ideas to life. In contrast, LVL’s more diversified approach enables it to invest in companies at various stages of development, from nascent businesses to more established enterprises. This gives LVL the flexibility to support businesses that are already generating revenue and scaling operations, in addition to startups in need of initial funding.

Both Blue Ocean Ventures and Lanka Ventures have played important roles in the Sri Lankan economy by fostering innovation and entrepreneurship. Their investments have helped to create jobs, stimulate economic growth, and promote the development of new technologies and industries in the country. By providing access to capital and expertise, both firms have empowered entrepreneurs to take risks and pursue ambitious business ideas, thereby contributing to the growth of Sri Lanka’s private sector. Moreover, the success of the companies in which BOV and LVL invest has the potential to generate significant returns for their investors, further strengthening the country’s financial ecosystem.

In conclusion, Blue Ocean Ventures and Lanka Ventures Limited represent two of the most influential venture capital firms in Sri Lanka, each with its unique approach to investment and business development. BOV focuses on seed-stage investments in innovative startups, offering both financial capital and strategic guidance to entrepreneurs. In contrast, LVL has a broader investment mandate, targeting a wide range of sectors and companies at different stages of development, including its energy-focused subsidiary, LEF. Despite their differences, both firms play a critical role in supporting the growth of the Sri Lankan economy and fostering the development of new industries. As Sri Lanka continues to evolve as a hub for entrepreneurship and innovation, the contributions of firms like Blue Ocean Ventures and Lanka Ventures will be instrumental in shaping the future of the country’s business landscape.