Pune, Hyderabad Lead The Race To Emerge As Next Startup Hubs Of India

While the Indian startup ecosystem is plagued by the ongoing funding winter, investors continue to remain bullish about the ecosystem expanding further across the country. As per an Inc42 survey, investors expect Pune, Hyderabad and Chennai to emerge as the next startup hotspots in the world’s third-largest startup ecosystem.

The survey, which received responses from over 50 active venture capitalist firms and angel investors to gauge which cities can emerge as the next startup hubs of the country, saw investors being most optimistic about Pune, Hyderabad, Chennai, Jaipur and Ahmedabad, in that order. 

Within these startup hubs, Chennai-based startups raised the maximum amount of funds in the first half of 2024. Startups based in the Tamil Nadu capital raised $250 Mn in H1 2024.

Trailing closely was Pune, which saw investments to the tune of $241 Mn via 18 deals. Lending tech startup Fibe’s $90 Mn funding round and Rebel Foods’ $13 Mn debt round were among these 18 deals. 

Startups in Hyderabad netted over $210 Mn via 26 deals in the first half of 2024. Meanwhile, Ahmedabad-based startups managed to secure over $62 Mn, while Jaipur’s startups raised $47 Mn. 

Overall, each of these upcoming startup hubs raised more funding in H1 2024 than they raised in the entire 2023.

For context, Chennai-based startups raised $211 Mn in 2023. Pune-based startups also raised the same amount of capital, but Chennai led in terms of number of deals. Hyderabad startups secured $129 Mn in 27 deals last year. Further, Ahmedabad-based startups bagged $46 Mn in 2023, while Jaipur’s startup ecosystem saw a capital infusion of a mere $8 Mn.

It is pertinent to note that startup funding remained subdued in the first half of 2024. Indian startups raised $5.3 Bn in H1 2024, down 1.8% from $5.4 Bn in H1 2023.

Bengaluru continued to retain the title of India’s startup hub, with startups in the city raising $1.57 Bn via 134 deals in H1 2024. Mumbai trailed closely with net capital infusion of $1.49 Bn from 91 deals. 

A better understanding of Bengaluru’s dominance in the Indian startup ecosystem can be gauged when one looks at it from a historical lens. Since 2014, Bengaluru-based startups have accounted for about 50% of total startup funding. Startups in the city raised $70 Bn over the past decade. The city’s closest competitor Delhi NCR saw a net capital infusion of $44 Bn, while Mumbai-based startups secured $20 Bn in the same period. 

Meanwhile, the funding raised by the emerging startup hubs of Pune, Chennai, and Hyderabad stood at $5 Bn, $4 Bn, and $3 Bn, respectively, over the last decade. 

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