Bengaluru Is Slipping Down On The Global Startup Hub Ranking


Bengaluru’s position on the global startup map has gone down, according to a report by Quartz.


India’s Silicon Valley is now ranked 20th in a global startup ecosystem ranking done by US-based research firm Startup Genome. Its position is five ranks down than what it was in 2015.

How was the ranking done?

The ranking is based on factors such as performance (including exits, valuations, early-stage and growth-stage success), funding, talent, market reach, and overall experience.

Startup Genome used data from Crunchbase, Dealroom, Orb Intelligence, and the Global Entrepreneurship Network, and interviewed experts from 25 countries to prepare the data.

It also examined which ecosystems offer the best chance of survival to early-stage startups and help them get global success.

However, the good news is that Bengaluru is the only Indian city that featured on the list that was made. Delhi’s startup system did not make the list but was declared a close runner-up.

What are the reasons?

One of the major problems with the Bengaluru startups is even though they command steep valuations, they do not offer the investors an exit route.

“This indicates that Bangalore either has a bright future as these startups mature or there’s trouble at the top of the market with acquisitions,”

the report said.

Although they find it difficult to get foreign investors, startups in Bengaluru have created strong ties with ecosystems in other countries.

As far as talent is concerned, Bengaluru faces challenges with access and quality of talent, but it is important to note that Bengaluru’s engineers are the most cost-efficient among the global top 20 countries, the report claimed.

The city is a magnet for Indian talent, with millions migrating to the city for work, many of them highly-skilled tech workers. On an average, Bangalore has the youngest tech workers among all startup ecosystems. It is this influx of youthful talent that has enabled the growth of a thriving startup culture in the city.

Attempts at fostering the startup culture in India

The startup ecosystem is flourishing in India and promises a lot to young entrepreneurs. The startups might turn out to be the solution to the growing problem of unemployment in the country. The central government with its scheme of ‘Startup India’ is sure to bring about a change.

Recently, the state government of Goa mentioned that the incentives under the startup policy had been finalized and they have been sent for cabinet approval. The policy promises of massive subsidies and incentives for startups.The biggest showstopper, however, is a one-time grant of Rs 10 lakh to a startup that promises a minimum viable product.

Uttar Pradesh has started a startup programme named INFUSE model (INcubators – FUnd of Funds – Startup Entrepreneurs). The state government will be providing a number of incentives to incubators, startups, and investors funding UP-based startups. The policy will provide startups with the necessary lands at cheaper rates and help set up industrial parks and estates of over 20 acres.

Punjab state government has proposed a state-of-the-art incubation centre at Mohali under the Startup Hub Initiative. This policy will cater to startups based on hardware, manufacturing, and related startups.

Off late, Odisha has also joined the camp as the cabinet of Odisha led by Chief Minister Naveen Patnaik has approved a series of incentives to ensure that at least 33 % of the startups with founders and co-founders as women emerge in the state.

Bihar has also followed suit and opened up a startup hub in the state capital.

Furthermore, in an attempt to provide an impetus to the early-stage startup ecosystem, markets regulator Security and Exchange Board of India (Sebi) plans to increase the maximum investment by angel funds in venture capital undertakings to Rs 10 crore from the current Rs 5 crore.

On the private front, Dr. Madhukar Angur founder of Alliance University is all set to launch an investment firm, Alliance Kapital and incubator center at Alliance University. The main focus of the investment firm would be those startups which are stuck in the initial stages due to financial crunch. The firm would aim to encourage startups in India by providing resources to kick-start their business.

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