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Tech Entrepreneurship is Brewing Up in Kathmandu, Nepal

Roshan Karki is a cancer researcher and one of the scientist advocates of Science Exchange Inc, an online marketplace for scientific services. He is passionate about disseminating the importance of science, technology, and innovation in developing nations. Roshan currently lives and works in Connecticut, USA. You can follow him on Twitter: @Roshancarkey

Everest

Mount Everest, the highest peak on earth, lies in Nepal. (Image credit: Wikipedia)

Paul Graham, co-founder of Y-combinator, a premier seed capital firm in Silicon Valley, notes in his essay, “The way to get startup ideas is not to try to think of startup ideas. It’s to look for problems.”

In this context, developing nations like Nepal offer innumerable opportunities. Flanked between two burgeoning economies, India and China, Nepal is a country with about 27 million in population, in transition with myriad political, social, economic challenges. The capital, Kathmandu (KTM), a major cultural and tourist hub, is marred by daily strikes, traffic disruptions, and scant supply of electricity and water.

Entrepreneurship here is not only a difficult proposition but also a novelty, garnering little public support and barely visible in any discourse. Culturally, starting your own enterprise, which isn’t risk-averse, is strongly discouraged and it’s implicitly understood that new ventures are best executed by already-successful businessmen.

Moreover, aspiring entrepreneurs may be viewed with suspicion, their ideas mocked, and their potential enterprise crushed long before its inception. Families can be particularly unforgiving of failures and unsupportive of ventures that require investment, incur financial loss, or face logistical issues during infancy.

The lack of organized venture capital firms, the reluctance of banks to issue loans to startup companies (unless putting up property as collateral), and apathy from the government are among the main challenges. These culminating dilemmas often compel aspiring entrepreneurs to give up on their ventures and seek safer working routes in banks or NGOs – deemed the most respectable avenues of business by Nepalese society.

Needing business oxygen

Despite all the aforementioned challenges, entrepreneurial spirit has been brewing steadily in Kathmandu, with a recent surge of online enterprises. This can be attributed to several factors: an increased literacy rate and a growing young population in the country; unprecedented access to faster internet, communication tools, and information technology; increased presence of returnees from abroad with creative ideas and risk-bearing attitudes; and the ease of remote collaboration among like-minded individuals around the world.

A quick review of recent startup companies in Kathmandu suggests that young entrepreneurs are either implementing ideas that are seemingly saturated in western markets but with a growth potential in Nepal, or simply coming up with innovative solutions in response to daily inefficiencies they encounter. While these companies are resilient to adverse technical and social challenges, the primary concern of long-term financial security remains, with the majority of companies run on personal or family funding.

To this end, the recent formation of Business Oxygen (BO2), a $14 million small and medium enterprise (SME) venture fund, initiated by the International Finance Corporation (IFC) and managed by the Bank of Kathmandu (BOK) and Beed Management Firm, is an encouraging step – although the fund is directed at growing businesses that are at least two years old.

Nevertheless, the fund aims to provide equity investment, risk capital, and advisory services to SMEs alleviating the financial burden of startups while channeling the focus of entrepreneurs to strategize on the company’s growth. The venture has identified key sectors in Nepal like agriculture, health, information technology, and renewable energy that will play vital roles in the country’s immediate development.

Certainly, the change of attitude towards entrepreneurship in a traditional society like Nepal will not occur overnight, but it is critical that government, educational institutions, and the civil society encourage entrepreneurship among youngsters, improve financial and investment regulations, and educate the public on the importance of innovation to impact progress of any society, a lesson also to be learned from our burgeoning neighbors. And as young entrepreneurs grow and address small inefficiencies today, it is inevitable, sooner than later; they will be able to take on the country’s bigger political, social, and economic challenges.

Kathmandu_Nepal

Kathmandu is the capital and largest urban agglomerate of Nepal. (Source: Wikipedia)

5 Nepali startups to watch

Here are five companies in Kathmandu I’ve read about recently and who are ones to look out for:

1. Biruwa Ventures

This aims to help startups – both for-profit and non-profit – by providing a nurturing atmosphere to cultivate ideas into sustainable and profitable companies. Currently, Biruwa Ventures provides modern office space equipped with essential amenities like 24-hour electricity, a faster Internet connection, clean drinking water, and the use of projectors, printers, scanners, etc., at affordable rates and often discounted in exchange for equity.

Serving like an accelerator, they also provide mentorship, regular networking with seasoned executives, and advice on logistic as well as providing legal support. Most importantly, Biruwa Ventures is in the process of securing relationships with banks to provide zero collateral loans, funding from local angel investors, as well as forming relationships with venture capital funds abroad to support entrepreneurs in Nepal.

2. MeroCampus

MeroCampus aims to disrupt the traditional method of college admissions by creating an online marketplace of of colleges and campuses (grades 11 and 12) in Nepal categorized according to popular courses and subjects. By bringing transparency to the admission process, fee structure, and the available amenities of the institutions, the students and their parents can follow and compare these institutions in real-time in their social networks, interact with other students, and make objective decisions about higher education plans.

This transparency will also help to stem unethical practices of charging exorbitant application fees and asking for ‘donations’ by some institutions. The site takes in a small commission for any student enrolled in the registered institution via their platform. More recently, MeroCampus has been continually providing valuable information on opportunities for higher education abroad along with relevant information about scholarship, fellowships, and stipends for many deserving Nepali students. And as co-founder Prabin told TechinAsia last year, the startup could expand its marketplace to other developing nations in future.

3. FoodMandu

Kathmandu’s food lovers adore street food and snacks, including the local favorite, momos (a kind of dumplings). However, access to these eateries can often be disrupted by traffic jams in the city, unavailability of parking in the vicinity, or inefficient lunch hours for working individuals. Foodmandu tackles this problem as a delivery service by liaising with a wide range of restaurants and eateries in the city, a service that is a surprising novelty, even in a metropolis like Kathmandu.

This mouthwatering service caters to working individuals, families and offices. With 75 member restaurants to choose from, users select food from the menu priced exactly the same as at the restaurants then order online, and pay cash upon delivery for the food, usually within an hour. The delivery is free of charge but a nominal delivery fee is charged according to the order size and distance from the restaurant. It is certain that such a service will appeal to office workers, small businesses, and private firms operating in the city where eating out leisurely during lunch is not an option.

4. CloudFactory

Started up in 2008 by Mark Sears, this is a web-based outsourcing platform that draws on Nepal’s citizens who need work. It puts them to paid tasks on the web, such as flagging bad content, inputting data, transcribing audio, tagging images – whatever a client needs. The Kathmandu-based startup employs over 90 people directly, but employs many thousands more via its platform.

CloudFactory even acquired two American firms, SpeakerText and Humanoid, in October of 2012 so that it could expand its services at the start of this year.

5. KTMcouriers

Another first of its kind in the city is recently launched KTMcouriers, a logistic company that specializes in reliable pickup and delivery of small goods and packages within Kathmandu. Just like a postal service, you place an order online or by phone, schedule a pick up, and track the package in real-time until it is delivered. The service comes with a guaranteed delivery time depending on customers’ needs.

To negate many inefficiencies of such a service and to ensure delivery on time, KTMcouriers came up with an innovative solution apt to Kathmandu – by deploying bicycle couriers for package delivery. They are tracked using GPS to help them navigate through the narrow roads and busy traffic of KTM and the service is therefore generally insulated from unexpected strikes or disruptions that are daily occurrences in the capital. KTMcouriers also offers services like paying your utility bills, picking up grocery items, or even delivering wedding cards. The company aims to expand outside the city in the near future.

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