Ever since the start of this millennium, Bengaluru has emerged as the Silicon Valley of India - a Desi version of its famed American counterpart.
One of the most prominent features of its tech ecosystem is its startup culture. In 2018, Bengaluru had the third highest number of startups globally, which generated over 40,000 direct jobs.
But in last few years, the city has faced increasing competition from other mushrooming tech hubs in cities like Hyderabad, Bengaluru, Delhi NCR and Mumbai.
Bengaluru’s well-wishers though can rest easy, as the Bengaluru Innovation Report 2019 report co-authored by Accel, 3one4 Capital and other prominent venture capitalists project that the city shows that the city firmly continues its reign as the country’s startup capital.
A Big Edge Over Competitors
As per the report, Bengaluru has seen the birth of 9,346 tech startups launched in the city since 2010, with 5,541 being launched in the last 4 years alone, a figure which is highest in India.
The Bengaluru startups have also raised a whopping $31 billion in the last 10 years which is 45 per cent of the funding raised by all Indian startups.
Compared to Mumbai and Delhi NCR, Bengaluru has seen more capital inflows than the two cities combined since 2016. The figure stands at $20 billion. The majority of (55 per cent) series D+ investments too have been made in Bengaluru.
When it comes to unicorns (startups valued at over $1 billion), 14 of them have been founded in Bengaluru, with a total valuation of $61 billion. Delhi and Mumbai, on the other hand, have birthed nine and five unicorns respectively.
This figure is expected to rise further as 43 per cent of soonicorns (companies which are likely to become unicorns) are currently based out of Bengaluru. The city’s top unicorns have been Byju’s Udaan, Swiggy and PhonePe.
The startup success is not limited to pure IT or tech domains as 25 per cent of deep-tech, fin-tech and health-tech startups in the city have received funding.
Bengaluru also leads in the number of tech companies founded since 2010, which has helped it take the mantle of India’s premier startup hub.
Bright Future For The City
The report quotes projections that Bengaluru is expected to remain Indian subcontinent’s fastest growing city with an average growth rate of 8.5 per cent for the next 15 years till 2035.
What further bolsters Bengaluru’s tech credentials is the fact that it contributes to a lion’s share of UPI transactions (38.1 per cent) and is the most millennial friendly city in the country.
The city is also aided by its migrant demographic as almost half of them (44 per cent) come equipped with a tech skill.
The report also expects the city to remain India’s top destination of tech talent and growth.
It adds that the world’s first pan-sector regulatory sandbox along with the strong supporting infrastructure will continue to push innovation in Karnataka and provide the right platform for new startups to launch.
The key to sustaining Bengaluru as No 1 in start-ups lies in urban renewal and infrastructure investment. Bengaluru needs freedom to manage its own transition from infrastructure-poor to infrastructure-rich. This calls for a sea change in how the city is administered and governed.