Democratizing Entrepreneurship

The confidence in startups has increased due to the remarkable success stories of companies like Hamrobazar, Foodmandu, Sastodeal, Hamro Patro, eSewa, Fonepay, and Khatli, among others.

 – Kavi Raj Joshi –

The notable evolution of the startup ecosystem in Nepal is just one decade old. However, within a decade, the Nepali startup movement has democratized entrepreneurship, as access to capital, networks, and knowledge has become more attainable for aspiring entrepreneurs, regardless of their family, professional or financial background. This has leveled the playing field, making entrepreneurship more inclusive and allowing innovative ideas to reach a wider range of people.

Discussion about the startup ecosystem began in Nepal around 2008/9 and gained prominence after Ujjwal Thapa and Ashutosh Tiwari, along with a few others through the informal community called Entrepreneurs for Nepal started the ‘Last Thursdays with an Entrepreneur’ series which led to frequent meetups, discussions and debates about startups in Nepal.

Around the same time, Biruwa Ventures came into the scene in 2011 and started offering co-working space, shared office resources, mentoring, and business support services, which acted as a Business Incubator for early-stage entrepreneurs. While we were studying at Kathmandu University School of Management (KUSOM), we also set up the Entrepreneurs’ Lab with support from various KUSOM alumni, professors, and the business community. Initiatives and firms such as Idea Studio Nepal, One to Watch, Next Venture Corp, and True North Associates also entered the scene to support startup companies and entrepreneurs.

This led to the launching of incubators, accelerator programs, and boot camps where budding and aspiring entrepreneurs were mentored. Willem Grimminck and his team at One to Watch started an accelerator program Rockstart Impact Nepal, True North Associates in partnership with Nepalese Young Entrepreneurs Forum (NYEF) came up with Enterprise – Nepal Business Accelerator Program, and Next Venture Corp brought NEXT Launchpad. Till 2022, these three were the major accelerator programs in Nepal till Aadhyanta Fund Management recently launched Aadhyanta Accelerator.

Biruwa Ventures, which initially started as a co-working space and also provided incubation support, later transformed into a consulting company. Nepal Communitere, a not-for-profit, operates I-Cube Business Incubation Program and also hosts a rapid prototyping lab called FabLab. Antarprerana started Nava Udhyamshala, and now they have also ventured into entrepreneurship development consulting across and beyond Nepal. They have been setting up incubators in different colleges and industry associations.

Udyami Seed Camp offered by Udhyami Innovations served around 100 startups while nurturing companies like Pure Joy Wines, Sroth Code Games, and Foodmario. Clock b Business Innovations has been another consistent contributor to the development of the startup support system in Nepal, primarily by providing access to seed capital. The contribution made by business schools like King’s College is also noteworthy.

The period from 2016 to 2019 was a golden time for the startup ecosystem. However, it experienced some slowdown after the Covid-19 pandemic. But the efforts made from 2016 to 2019 will continue to yield results, I believe. With the startup ecosystem gradually maturing, accelerators are increasingly emphasizing sustainable businesses, not just focusing on new ideas but also on serious business ventures, choosing to work flexibly with a few startups at a time over the traditional batch-wise model.

Had there been no startup like Tootle, neither Pathao would have come to Nepal easily nor urban transportation would have been decentralized this way. Even Uber tried to enter the Nepali market multiple times, but it couldn’t due to a lack of confidence. When Sixit Bhatta took a risk and started Tootle, it changed the scenario and also built acceptance in the local market. The way people accepted Tootle encouraged Pathao and others to make investments and expand in Nepal.

Digital payment companies have been securing transactions and decentralizing banking for common people. The likes of eSewa and Khalti not only digitized payment but also changed the way of shopping in the country.

Another area where startups have made an impact is food delivery. Now,  whoever has good cooking skills can open virtual restaurants with very low or no investments. The best of information technology, customer support, and logistics networks put together like Foodmandu, Bhojdeals, etc. has made the concept of ghost kitchens and virtual restaurants achievable, while also allowing any good food station from cityside to compete and win over large restaurants in downtown by removing location barriers.

Additionally, the impact of e-commerce extends beyond physical limitations. Physical stores demanding high rent, staff, and maintenance are no longer necessary, as entrepreneurs can open virtual stores on platforms like Daraz or Sastodeal. The Tootle-Pathao story applies here too. Had Amun Thapa and his team not worked hard over the last decade, Daraz Kaymu probably would not have been here to serve us that soon or that easily. While Daraz has established itself as the leading e-commerce platform in Nepal, it is equally important for us to recognize the significant contribution of Sastodeal as a first mover in educating vendors and transforming consumer behavior.

The healthcare industry is undergoing significant change. Hamro Health, which sends health reports of every child to both the school and parents is an example. They conduct regular tests such as weekly check-ups, monthly OPDs, yearly mental health screening, dental check-ups, and eye check-ups. This disruption in healthcare is leading to a more proactive and preventive approach, allowing for early intervention and improved overall healthcare outcomes. Imagine when the entire nation has access to tech-enabled health services with more companies like Midas Health, Cogent Health, Health At Home, ePharmacy, and Doctors on Call coming up and growing.

The media industry is also going through similar disruptions. A prime example is the emergence of Hamro Patro, which has become a leading news distributor with a substantial volume of news content. In addition to its own success in the core business, Hamro Patro has empowered numerous small news media outlets by providing them with a platform to reach a wider audience. These innovations are reshaping the media industry, enabling greater access to information and opening up opportunities for smaller players to thrive alongside legacy media organizations.

The confidence in startups has increased due to the remarkable success stories of companies like Hamrobazar, Foodmandu, Sastodeal, Hamro Patro, eSewa, Fonepay, and Khatli, among others. It has also instilled a belief that startups have the potential to grow and make changes in society.

Early comers like Sastodeal, Foodmandu, eSewa, etc. have not only shown opportunity and changed consumer behavior but also played a vital role in training and developing human resources within their industry domains who are now leading various competing firms or related functions across the larger industry. The emergence of Tootle created a space for enabling the dynamic and competitive ride-hailing industry. In the digital payments sector, eSewa has achieved extraordinary success but with all the hard work and patience of over a decade, while Khalti and the payment system operator Fonepay have taken their coverage and services to the next level in a short span of time.

It is worth mentioning that Nepal boasts companies like Grepsr, Incessant Rain Studios, Fusemachines and many other local-global firms which we can take pride in. These companies have made substantial strides, creating employment opportunities, providing global exposure, and offering competitive salaries. Also, not to forget is the contribution of active investors and firms like Business Oxygen, Dolma Impact Fund, Movers & Shakers (M&S), Tele Ventures, One To Watch, True North Associates, Team Ventures, etc. who later paved the way for venture capital and private equity investments in Nepal.

While it is important to recognize and celebrate the successes of startups, it is equally crucial to acknowledge the challenges and limitations that exist within the startup ecosystem.

The startup ecosystem, for it to be a true ecological system, requires a well-rounded cycle that nurtures startups from their early stages, allowing them to grow, transform and succeed. In foreign countries with more matured markets, this ecosystem involves active participation from local government units, universities, incubators, and accelerators, along with investors, regulators, and the state. These entities work in tandem to provide support, resources, and guidance to startups, reducing the chances of failure and promoting their overall growth.

A thriving ecosystem requires more than just financial support from its members. It also relies on the active participation of big corporations in purchasing products and services from startups. Restricting or discouraging new players from entering the market raises questions about whether a true ecosystem is being envisioned and promoted by large businesses and their welfare associations.

Diversification beyond the export of human resources is crucial for the sustainable growth of Nepal. While the manufacturing sector can play a vital role in this regard, large-scale opportunities exist in energy, tourism, and IT services. Proactive policy-making by the government is essential to support these sectors. Merely creating policies is not enough; there must be effective implementation and delivery of those policies. Startup schemes, which the government announced a few years back, initially gained significant traction. However, the government’s dillydallying to roll out the startup support, grants, and loans saw that excitement waning down.

Nepali startups often face limitations in their vision and reach. Unlike startups in India and South East Asia, which tend to think about serving at least the Asian market, or startups in China, the UK, and the US that aims to cater to the broader global market, Nepali startups often confine their ambitions within the boundaries of Kathmandu valley or, at most, limit their scope to major cities nearby the capital.

In Nepal, it is crucial for the government to establish a dedicated department or ministry specifically focused on startups and entrepreneurship development. This department should prioritize creating an environment that is conducive to startups and offers IT-friendly initiatives. Following the examples set by startup-friendly countries, having a separate startup ministry can streamline efforts, provide specialized support, and foster a more effective startup ecosystem.

Joshi, a startup ecosystem builder, is the Chief Executive Officer of Apex College Limited and Managing Director of Next Venture Corp & Udhyami Innovations.

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