A Deep Dive Into The Rapid Rise Of Rajasthan’s Startup Ecosystem

Rajasthan, the largest Indian state by area (3,42,239 Sq kms as per 2011 census), has long been a favoured destination for major corporations such as Honda and Ambuja Cement, which have made significant investments in the region. Additionally, Rajasthan is rich in minerals and precious metal reserves and is home to a thriving tourism sector and textile industry.  In the era of rapid digitalisation and technology boom, the state’s potential for disruption is evident. Rajasthan boasts more than 3,700 DPIIT-registered startups, a testament to its pivotal role in shaping the future of India’s startup landscape. 

According to Inc42 research, the startup ecosystem in Rajasthan is driven by key sectors such as enterprisetech, ecommerce and edtech. Several startups featured in the report have benefited from the state government’s flagship initiative – the iStart programme. The state-led endeavour provides vital support through funding, mentorship and infrastructure, enabling startup ventures to scale up their operations and explore new markets.

In our latest report, State of Rajasthan Startup Ecosystem Report 2023, we have shed light on the state’s journey to emerge as a thriving hub for tech startups.

The report offers a panoramic view of the state’s startup landscape. It provides in-depth insights into the key sectors driving growth, the challenges and opportunities faced by startups and the role of the government and investors in propelling the ecosystem to new heights.

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How Rajasthan Is Becoming A Fast-Growing Startup Hub

The 2023 report thoroughly analyses Rajasthan’s startup ecosystem, taking a deep dive into every business essential, from government policies and ecosystem enablers to market trends and top emerging sectors.

 Based on our findings, the state capital of Jaipur houses more than half (53.3%) of all startups in Rajasthan, thus cementing its position as the top-performing startup hub in the state. 

The Pink City’s appeal stems from its skilled talent pool, strategic proximity to leading startup destinations like Delhi and Gurugram, its cost-effective business environment and affordable standard of living.

However, other cities across Rajasthan are gaining momentum mainly due to the state government’s overarching iStart incubation programme. This initiative has a wide reach and covers several cities such as Jodhpur, Udaipur, Bikaner, Kota, Bharatpur, Pali, Churu and others.

Venture capital funding is another key indicator pointing towards Rajasthan’s rising startup culture. With a 46% CAGR in funding since 2018, VC investments in the state’s startups have outpaced established hubs like Delhi-NCR and Mumbai.

The surge coincided with the launch of iStart in 2017, enhancing the ease of doing business and fostering a favourable environment for new ventures.

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Since 2014, Rajasthan-based startups raised more than $307 Mn (cumulative as of H1 2023) in funding from local and global investors, with marquee names such as Peak XV Partners (formerly Sequoia Capital India), Y Combinator, LetsVenture, Marwari Catalysts and Avaana Capital showing confidence in the state’s startup potential. Interestingly, 25% of all startup founders in Rajasthan are women, showcasing a more egalitarian startup landscape than other leading hubs in the country.

 

Key Government Initiatives To Boost Rajasthan’s Startup Ecosystem

The iStart programme has helped create more than 29K jobs in Rajasthan while onboarding more than 3,900 startups. Of these, 1,100+ startup ventures specialise in cutting-edge technologies such as AI/ML, AR/VR, green energy and more. Here is a quick look at the six measures taken by the state government to promote startups.

• Incubation: iStart Rajasthan offers state-of-the-art incubation centres, providing startups access to physical infrastructure, mentorship, networking opportunities and business support services.
• Finance: The programme also offers financial incentives, grants and funding to eligible startups, enabling them to cope with initial capital challenges and accelerate their growth.
• Innovation: iStart periodically holds competitions and innovation challenges to inspire startups and develop solutions for societal/industry-level problems.
• Mentorship & networking: Startups can also access a network of experienced mentors, industry experts and investors for guidance, insights and engagement to overcome obstacles and scale up operations.
• Skilling: In tune with continuous learning for growth, training, workshops and capacity-building programmes are held in critical areas such as business development, technology and management.
• Collaboration: iStart Rajasthan also collaborates with government departments and agencies to streamline regulatory processes, minimise bureaucratic hurdles and foster a conducive business environment for startups.

These initiatives are part of a bigger picture we have endeavoured to encapsulate in the report. Apart from our research-backed data insights, readers will also come across some of the most innovative startups in Rajasthan and how they stand out from the rest. Many of these startups are challenging existing norms and aiming to disrupt unicorns/well-funded late-stage startups while benefiting Tier II and III consumers.

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