ILLUSTRATION: KATMANDU JOURNAL
CONSIDER A specific kind of person. They are, in the context of Nepal, really rich: a net worth of several crore rupees, built through a decade or two of business in construction, trading, import, banking or real estate. They are well-connected, probably educated abroad and keenly aware that the country they live in is changing. Their children talk about technology startups over dinner. They read about the software sector’s growth in the newspapers. They know, in the abstract, that early-stage investment in a promising company can produce extraordinary returns. And when a young entrepreneur comes to them looking for seed capital—a few million rupees in exchange for a stake in something early and risky and potentially very good—they say no, or more likely, they say nothing, because the conversation never really gets started.
This is a story about what Nepal’s wealth has been taught, over a generation, to do with itself; and what it has never been taught to risk.
Across the roughly 3,960 startups that Tracxn, a data firm, counts in Nepal, total funding raised in all rounds across all time amounts to $258m. Statista, a data firm, estimates that the venture capital market in the country raised $44.7m in all of 2024. Both figures almost certainly undercount actual domestic activity: international aggregators mostly capture formally filed cross-border transactions and miss a big portion of local Specialised Investment Fund activity authorised under SEBON’s regulations. The Nepal Private Equity Association estimates that local funds deployed some $35m in 2023 alone, with cumulative domestic alternative investment crossing well over $100m.
The true figure is larger than the foreign databases suggest. It is still, by any serious comparison, extraordinarily small. A single mid-sized technology startup in Bangalore or Jakarta might raise as much in a single Series A. Nepal’s early-stage capital market, across every sector and every source, operates at a scale that its region would describe as nascent and its competitors would describe as absent.
The money is not absent from Nepal. The problem is where it sits and what it does there. When the Shah government published its cabinet ministers’ asset declarations in April, political analyst Hari Roka observed what anyone looking at the list could see: “Investment in gold and real estate reflects the priority areas of ministers.”
Former NRB governor Deependra Bahadur Kshetry was more pointed: “Investment in gold reflects a tendency to prioritize individual gain over collective benefit.” Across Nepal’s wealthy class—not just the politicians but the business families, the trading houses, the import merchants—the preferred store of value is land, gold and NEPSE stocks, in that order
The logic is not irrational. Land in Nepal has historically appreciated faster than almost any other asset. Gold is liquid, culturally valued and, in a country with a history of political instability, a reliable hedge against the state’s unpredictability. NEPSE—the stock exchange, with 284 listed companies—offers the illusion of diversification while concentrating exposure in banks and hydropower stocks. The hydropower segment deserves a description: a handful of mature, long-operating projects such as Chilime Hydropower do pay dividends and have earned their premium.
Yet the broader hydropower universe on NEPSE is far more speculative. Many under-construction or newly commissioned hydro stocks trade at high multiples despite paying no dividends and carrying heavy debt loads. High-net-worth Nepalis buy them for capital appreciation during NEPSE bull runs, not for income: which makes them a bet on market sentiment rather than a store of value in any conventional sense.
These are all ways of deploying wealth in forms the holder understands, which is the instinct of a generation that built its fortune in a country where the rules could change without warning and the government that guaranteed your investment today might not exist tomorrow.
Angel investing requires a fundamentally different psychology. You give money to a young person with an idea, knowing that most ideas fail, accepting that you will probably not see that money again, betting that the one in ten that works will return enough to make the whole exercise worthwhile. You also accept that between the investment and the return, your money is illiquid, your risk is unhedged and your control is limited.
In mature economies, this psychology is cultivated by a specific combination of factors: a culture of entrepreneurial respect, a legal framework that makes equity ownership straightforward and enforceable, a tax system that rewards the risk of early-stage investment, and a social environment where failing publicly and trying again is not catastrophic. Nepal has none of these in developed form.
The legal framework is the most concrete obstacle. Nepal has no mechanism equivalent to a convertible note: the simple, flexible instrument that angel investors elsewhere use to inject money quickly without immediately negotiating a company valuation. Every equity investment requires a formal share issuance, a company valuation, approval from the Office of the Company Registrar, and in many cases involvement of the Department of Industry.
The process takes months and costs lawyers’ fees that often exceed the investment itself at seed stage. A wealthy Nepali who wanted to write a cheque for Rs3m to a promising founder would face more red tape than a typical property transaction, with none of the cultural familiarity. Most just do not bother.
Taxation adds a further disincentive. Nepal offers a five-year income tax exemption for registered startups, a policy introduced in 2024 alongside the government’s first official definition of what a startup is. But the exemption applies to the startup’s profits, which in the early years are nonexistent.
For the investor, there is no equivalent tax treatment: there is neither capital gains relief on exit nor deduction for the investment made, nor any ability to carry forward losses against other income if the startup fails. An angel who backs ten companies and loses money on eight, breaks even on one and makes a return on the last has no mechanism to offset the losses against the gain. Every successful exit is taxed in full. Every failure is a loss.
The government’s own attempt to fill the gap shows how far from an angel culture Nepal currently sits. The Startup Enterprise Credit Operation programme—through which the government offers collateral-free loans of up to Rs2.5m at 3% interest, repayable within five years of the first disbursement—received 5,158 applications in fiscal year 2024-25 and funded 165 of them. Three percent of applicants. The funded startups received debt, not equity: money they must repay regardless of whether their businesses succeed.
This is the government offering a small loan where a functioning angel ecosystem would offer patient capital with shared upside. The two instruments are not interchangeable. And the programme’s existence should not be mistaken for an angel market.
What Nepal’s wealthy class has not yet absorbed is that the country’s demographic and technological moment makes the risk calculus different from what it was. The generation that built wealth in real estate did so in a country where land was scarce, urbanisation was rapid and property values compounded reliably.
That era is not over, but it is slowing. The generation now building startups—in software, fintech, agri-tech, digital health—is doing so in a country with more than 10,000 ICT graduates a year, a technology export sector that industry estimates put at some $1bn and growing, and a government that has, for the first time, removed the minimum investment threshold for foreign capital entering the technology sector. The environment for technology businesses is better than it has ever been. The domestic capital to fund them at their earliest and most critical stage is almost entirely absent.
The one exception that makes the rule seen is Binod Chaudhary, Nepal’s only Forbes-listed billionaire, whose Chaudhary Group has expanded across noodles, banking, hotels and cement into a conglomerate that spans 30 countries. Chaudhary is the product of a particular kind of Marwari trading-family culture that combines commercial ambition with family capital discipline across generations. He is not an angel investor in the modern sense, but he represents what domestic capital deployment at scale can produce. The absence of a broader class of investors willing to take similar risks at earlier stages—Rs20m rather than Rs20bn, startup stakes rather than conglomerate expansion—is the gap between what Nepal has and what it needs.
The diaspora is the obvious pool to draw from. Shesh Ghale and Jamuna Gurung, who built the Melbourne Institute of Technology from Nepal-origin capital into a billion-dollar education group in Australia, have deployed wealth into Nepal. So has Upendra Mahato, who built his fortune in Russia before returning to invest in telecoms, banking and healthcare. These investors are not, strictly speaking, in the same legal position as a pure foreign investor: under the Foreign Investment and Technology Transfer Act and recent NRN regulations, holders of Non-Resident Nepali citizenship cards face different approval thresholds and repatriation rules from those applying to wholly foreign entities—modest advantages but real ones.
In practice, however, figures like Mahato or the Chaudhary Group deploy capital through formal corporate structures, institutional holding arms and private equity vehicles rather than personal cheque-book angel investments. They are institutional actors who happen to be Nepali by origin, not the seed-stage individual backers that a young founder with a pitch deck actually needs.
The Shah government’s budget on May 29th is expected to carry provisions for the startup ecosystem: potentially including the Rs1bn Alternative Development Finance Fund and further tax measures for technology investment. What it almost certainly will not carry is a comprehensive reform of the equity investment framework: the convertible note mechanism; the angel tax relief; the loss carry-forward provision that would, in combination, make it financially rational for a wealthy Nepali to back a founder rather than buy another ropani of land.
Nepal needs domestic investors willing to back early-stage companies before the ecosystem matures enough to justify backing them. The ecosystem cannot mature without the investors. And the investors will not appear without the framework that makes backing companies more attractive than buying gold. Somebody has to move first. ■
