Current Scenario for Startups in Nepal
Start-ups in Nepal
The development of technology has drastically evolved the new business startup in Nepal in current scenario. With this development, the youth’s involvement in commencing startup ventures is also in the phase of rising. In a simple definition, startups are entrepreneurial ventures that may be a new business or in a phase of growing business. They aim to meet the market requirements by designing and coming up with innovative goods/services. Currently, Nepalese startups are working on various areas of the market. Such as ride-sharing, food delivery, recycling, financial technology, agriculture, e-commerce, and many more.
In the past few years, the development of technology in the country has evolved drastically. With this development, the youth’s involvement in commencing new business startup ventures in Nepal is also in the phase of rising. In a simple definition, startups are entrepreneurial ventures that may be a new business or in a phase of growing business. They aim to meet the market requirements by designing and coming up with innovative goods/services. Currently, startup in Nepal are working on various areas of the market such as ride-sharing, food delivery, recycling, financial technology, agriculture, e-commerce, and many more. Red Mud, E-Sewa, Khalti, Tootle, Urban Bazaar, Foodmandu, Foodmario, Khalisisi, are the new names of growing and impactful business startup in Nepal.
Major startups of Nepal
Startups and SMEs play an essential role in every country’s economy and contribute around 40% of the total GDP and 60% of the total employment (https://www.worldbank.org/en/topic/smefinance). SMEs and startups have contributed around 22% of the GDP and around 17 lakhs of employment in Nepal (https://kathmandupost.com/money/2020/04/28/without-immediate-support-small-and-medium-enterprises-on-verge-of-collapse). Being a developing nation in the world economy, Nepal has brought a diverse field of opportunities. Recognizing such an opportunity and identifying a gap in the logistics industry, Upaya-City-Cargo was formed as a facilitator to provide an online market place for intra-city logistic service. It connects individuals and businesses with their cargo–partner drivers.
Similarly, depending upon the idea and business model of the product/service, startup ventures do have lots of opportunities here. However, entrepreneurs should know about their potential market and product/service clearly. To identify their correct target audience and technology to solve the problem. For example, the growing number of internet users, free Wi-Fi zones, mobile data has made it easier. For startups that run on the internet such as e-commerce businesses. Even angel investors are now turning their investment from traditional business to innovative business. Nepal’s first food delivery platform Foodmandu has been able to secure its second round of funding from a private equity company Team Venture. Likewise, the E-commerce site Sasto deal was also able to secure Rs. 90 million from another private equity firm known as Dolma Impact Fund. This indicates that the Nepalese startup ecosystem is gradually growing and slowly becoming avenues of investment.
Situation of Startups
Although the startup ecosystem is growing and opportunities are being identified, many entrepreneurs still do face a lot of challenges. A recent example is a regulatory challenge faced by two ride-sharing startups Tootle and Pathao. According to the law, private vehicles are not allowed to carry passengers like public transportations. The government was not wrong with its laws. They were wrong with their harsh intention towards the startups. Old and outdated laws have become a challenging part for startups in Nepal. Tootle was also prohibited to operate by the government for not paying their taxes on time. The global statistics also state that 90% of startups fail, and almost 50% of startups that have existed 4 to 5 years ago have now stopped functioning. (https://www.forbes.com/sites/neilpatel/2015/01/16/90-of-startups-will-fail-heres-what-you-need-to-know-about-the-10/?sh=40b5b6f86679).
Working culture is one the factor that has caused new business startups in Nepal a big challenge. As it has an essential role, its awareness is extremely critical. Another factor is the lack of proper guidance and quality mentorships. As the number of startups and entrepreneurs is growing. The number of mentors is not enough for the growing number of ideas. Similarly, secure technology is also one of the most essential factors because startups today cannot function properly without it. The challenging part for most startups is to handle and protect the confidential information of customers such as email, bank/card details, phone numbers from being cyber-attack. Likewise, talented youths are leaving abroad to seek employment opportunities. This has led to a lack of skilled manpower that is necessary for daily operation.
Startups do provide technological development and innovation in the country’s economy with employment opportunities. However, the survival of startups is one big challenging part caused by the uncertain economy. And also lack of failure to raise investments leading to risky spending.