Which city is India’s startup capital?

This year’s Economic Survey stoked a debate that many thought was almost a settled issue. The Survey says Delhi NCR added 5,000 recognised startups between April 2019 and December 2021 as against 4,514 in Bengaluru. Maharashtra with 11,308 recognised startups tops the charts among states.Newspaper headlines played it up well.“Delhi dethrones Bengaluru as India’s startup capital” – announced one.“Delhi, not Bengaluru, is India’s startup capital” – said another.A mini Twitter war has broken out as Bangaloreans and Delhiites take their positions. Delhi’s chief minister got into the act, congratulating his city for overtaking Bengaluru.Congrats Delhi for yet another achievementDelhi with 5,000 start-ups replaces Bengaluru as start-up capital: Econ… https://t.co/3oovYFu5OI— Arvind Kejriwal (@ArvindKejriwal) 1643633381000There was pushback to that, with several people saying Delhi hadn’t done anything spectacular; it was the National Capital Region, which includes Gurugram and Noida, that had more startups. Fake information. Misleading title.Delhi hasn’t popped Bangalore as start-up capital, the NCT of Delhi has. Most… https://t.co/U0mMOUszIf— Atul Mishra (@TheAtulMishra) 1643950311000Supporters of this line of argument say that it’s unfair to compare a conglomeration of cities (Delhi, Gurugram, Noida, Faridabad, etc) with one city, Bengaluru. And, they say, when it comes to states attracting startups, Maharashtra walks away with the crown, so the performance of cities shouldn’t matter.Even as the arguments and counter-arguments fly thick and fast, some things are clear. First off, any competition is good. So our top cities competing to be startup capitals is overall a win for India’s startup ecosystem. I see this as a welcome squabble.This isn’t the first time that Delhi NCR showed up on the national radar like this. In 2019, Zinnov released a report ‘Turbocharging Delhi-NCR’ where it said Delhi NCR had the largest number of startups at 7,000 accounting for 23% of the total in India.Cut through the noise and what do these numbers really mean? Is the number of startups a good measure to declare which is India’s startup capital? And more importantly, how do you define startups? According to the government, a startup is defined as an entity that is headquartered in India, and was opened less than 10 years ago and has an annual turnover of less than Rs 100 crore. This leads to more questions. What kind of startups are these? Are these only technology-led startups or do they include other kinds, including brick-and-mortar and other kinds of small and medium businesses which are not necessarily tech-led and scalable? !function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r I ask these questions because in 2019, when Zinnov released its report, I was at the event at Taj Mansingh Delhi and I had some insightful conversations with a few experts there probing the same topic. The above questions emanate out of that.So, let’s look beyond the limited sets of data to understand where we really are as a country that welcomes startups.A little background may be useful to understand where I’m coming from. I have lived and worked in Delhi for over three decades and have interacted with business leaders from all walks. And I have spent the last two years of my life trying to understand Bengaluru well and have spent close to six months in Bengaluru working on a book on this city. Over the period, I have had at least 300 deep-dive conversations with a range of people who understand Bengaluru from different angles. Besides those in India, I’ve got perspectives from many who are based out of Silicon Valley, Europe, China and Israel and are looking at India.Follow the moneyFirst, some data I would like you to consider. Let’s start with funding. After all, a money trail should offer relevant data and an unbiased view to understand India’s startup ecosystem and the pecking order. Between 2019-21, according to Tracxn, Bengaluru-based startups took 49% of funding – $30,721 million as against Delhi NCR’s $18,699 million (30% of the total). In 2016-18, Bengaluru’s share stood at $12,502 million (45%) as against Delhi NCR’s $9953 million (36%). !function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r !function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r Let’s now look at the unicorn map of India. According to Venture Intelligence, India had 81 unicorns (startups with valuation of over $1 billion) as of December 31, 2021, with Bengaluru leading the list with 34 startups. Delhi NCR accounted for 23 unicorns. In 2021, India created 44 unicorns, of which 17 came from Bengaluru and 11 from Delhi NCR.Another important indicator is early stage investment. In 2021, Bengaluru reported 250 early stage investments, as against NCR Delhi’s 174, according to Venture Intelligence.Beyond the numbersLooking beyond the numbers, I know that the draw of Bengaluru is multi-dimensional. I know of a range of companies and professionals who have moved to the city in the recent past. They include brick-and-mortar MNCs like Ikea that shifted base from NCR to Bengaluru. Then there are startups like Scaler that shifted base from Pune to Bengaluru. Razorpay, incubated in Rajasthan (close to NCR), shifted base to Bengaluru. Teabox shifted here from Siliguri. Kunal Shah of Cred too moved from Mumbai to Bengaluru. This is just a small list of the many who have been shifting base to the city at a personal and professional level.Why are these professionals and startups shifting base to Bengaluru? I offer six reasons that make Bengaluru India’s top startup hub:Bengaluru’s DNA of ideas: Delhi is India’s national capital. Political power is the dominant language and relationships here are defined and shaped by a range of hierarchies. That’s what shapes how people deal with each other. Mumbai is India’s financial capital where stock market and market capitalisation set pulses racing. Far away from these two mega hubs, in Bengaluru it is ideas that dominate. There is a vibrant collaborative culture that has played a pivotal role in nurturing young startups. It is something hard to beat for any other city.Cosmopolitan city: From globetrotting Indians to expats, from young people to women professionals, from traditional North to conservative South, people from all walks have come and settled down in Bengaluru. The ease, comfort and safety with which they have settled down in the society and become a part of it is an important draw. It helps that Bengaluru is not linguistically conservative; people get by with speaking English, Kannada, Hindi, Tamil or a mix of these languages. Few other cities have this ease; for all that Delhi is home to expats from around the world, it’s impossible to get by in the city without a working knowledge of Hindi. Despite sporadic outbursts from Kannada language purists, Bengaluru remains open to all. Tech culture: From the time of Independence, from high-tech PSUs and government bodies like ISRO, HAL, IISC, Bengaluru attracted top science and technology talent from all over India. That legacy has laid a very strong foundation in building the science and technology culture in the city.This is India’s IT capital where the stories of Infosys and Wipro began in the late 20th century. From IT outsourcing to GICs (global innovations centres) to startups – the city has managed to transition from one wave to another smoothly – while leveraging its past well.Network effect: With a high talent density of IT and technology professionals, the city has very rich and vibrant social and professional networks. All of it helps create the buzz factor – hard to measure but impossible to miss in the city.Global recognition: Global recognition and reputation matter. And here’s how the city stacks up at a global level. Bengaluru is ranked 10th as per Global Startup Ecosystem Index 2021 by Startup Blink, only Indian city to be featured in top 10. It is also ranked 23rd among global cities, as per Global Startup Ecosystem Ranking report 2021, the only Indian city to be featured in the top 30. On the world map, Bengaluru is still the only Indian city that registers as a startup hub.Lovely weather: Don’t underestimate the weather. It is a powerful draw for many – young as well as old, Indian as well as expats.It goes without saying that the startup world isn’t static. Just look at the US, where Silicon Valley is seeing competition from states like Texas. India’s Silicon Valley is seeing something similar playing out. The city has its share of challenges, including nightmarish traffic and creaky infrastructure. To ensure that it doesn’t lose its position again, city authorities would do well to address these problems.Untitled Carousel 86512145