SUMMARY
The 11 emerging startup hubs have collectively raised over $4.5 Bn between 2014 and H1 2022 and are home to more than 9,809 startups
Many of these states also feature in the list of top-performing state ecosystems in terms of local startup ecosystem development
Inc42 has compiled a list of the emerging startup hubs, as featured in our latest report, ranked in terms of the funding raised between 2014 and H1 2022
Traditionally, India’s startup ecosystem has been concentrated in the Tier 1 cities of the country, with Bengaluru and Delhi NCR being the two largest startup hubs of the country.
However, over the years, India’s startup ecosystem has moved beyond the big cities to Tier 2 and 3 cities also. Inc42’s ‘The State of Indian Startup Ecosystem Report, 2022’ lists out the 11 states which are the fastest-growing startup hubs in the country.
These emerging startup hubs, which include states such as Telangana, Rajasthan and Gujarat and cities such as Hyderabad, Jaipur and Ahmedabad, have collectively raised over $4.5 Bn between 2014 and H1 2022. These 11 states are also home to more than 9,809 startups.
Let’s take a look at these startup hubs of the country.
List of Emerging Startup Hubs In India
Telangana
With the state’s startups raising $2.5 Bn in funding between 2014 and H1 2022, Telangana is at the top of the list. One of India’s youngest states, Telangana is home to one of India’s fastest-growing emerging startup hubs in Hyderabad. Telangana is also the only state on this list which can boast of a unicorn – SaaS unicorns Darwinbox and Zenoti are based in Hyderabad.
The state government has a startup innovation hub called the Technology Hub. First launched in 2015, the second phase of T-Hub was launched on June 28 this year. The innovation hub has incubated more than 1,100 startups so far. Further, the Telangana government infused over INR 300 Cr in the second phase.
In the recently announced States’ Startup Ranking, 2021 by the Department for Promotion of Industry and Internal Trade (DPIIT), Telangana was placed among the ‘Top Performers’, the second-highest category in the rankings system.
Rajasthan
The largest state of India by land area is placed second on the list, the state’s startups have raised $1.1 Bn between 2014 and H1 2022. Rajasthan has four emerging startup hubs – Jaipur, Jodhpur, Kota and Udaipur, with Jaipur finding a place in the top 10 emerging startup hubs in the country.
The state government also organised the Rajasthan DigiFest 2022 on August 19 and 20 to boost startups in the state. The two-day event connected entrepreneurs, students and other stakeholders in the startup ecosystem.
The state has more than 10 incubators, with INR 5 Cr disbursed by the state government to startups and incubators, according to numbers from the States’ Startup Ranking, 2021, where it ranked among the ‘Aspiring Leaders’.
Gujarat
With the state’s startups raised $816 Mn between 2014 and H1 2022, Gujarat is among the top emerging startup ecosystems in the country. Ahmedabad and Surat are the two biggest startup hubs in the state, with Lendingkart, Hubilo and Renee among the notable startups which call the state their home.
The state has more than 216 registered startups. Gujarat has also announced a slew of initiatives to foster its startup ecosystem. Last week, the state announced its drone policy to facilitate drone startups and generate 25,000 jobs. In March, the Gujarat government earmarked INR 500 Cr for climate tech startups.
In terms of the Centre’s rankings, Gujarat was adjudged to be the ‘Best Perfomer’ along with Karnataka and Meghalaya in the States’ Startup Ranking 2021. It also ranked among the top 7 achievers in terms of Ease of Doing Business rankings.
West Bengal
West Bengal is home to over 125 startups, with these startups raising $153 Mn in funding raised between 2014 and H1 2022. The state’s capital, Kolkata, is among India’s up-and-coming startup hubs, and the likes of Wow! Momo, Hoichoi, Tablt and Now Purchase call the eastern state home.
The state government launched a one-stop portal for all things startup, Startup Bengal, in 2016. West Bengal also has a startup policy, which aims to make the state one of the top startup hubs in the country.
Incidentally, the state did not participate in the States’ Startup Ranking 2021 but was placed as an ‘Aspirer’ in the Centre’s Ease of Doing Business rankings.
Punjab
The state of Punjab and the Union Territory of Chandigarh are home to more than 400 startups, the fourth-most among the emerging startup hubs. These startups have raised $101 Mn between 2014 and H1 2022.
IMPunjab, a private sector-led initiative with the support of the state government, aims to establish Punjab amongst the top three innovation hubs in the country. IMPunjab will invest in 15 startups in sectors such as agritech, deeptech, food processing, logistics, and edtech.
The state has also launched the Startup Punjab Cell for all knowledge dissemination for startups in Punjab.
In the States’ Startup Ranking 2021, Punjab was placed among the ‘Leaders’, while Chandigarh was placed among ‘Aspiring Leaders’.
Andhra Pradesh
Andhra Pradesh is among the few states that have more than 1,000 registered startups. The states’ startups raised $95 Mn between 2014 and H1 2022. Visakhapatnam and Vijayawada are two of the biggest emerging startup hubs in the state.
The state also has the Andhra Pradesh Innovation Society as the nodal institution to provide institutional support to its startup ecosystem. Addressing a session of the World Economic Forum in Davos in May, Andhra CM YS Jagan Mohan Reddy urged startup unicorns to make the state and Visakhapatnam a startup hub.
Andhra Pradesh was among the states in the ‘Emerging Startup Ecosystems’ category in the States’ Startup Ranking 2021, while it was a ‘Top Achiever’ in the Centre’s Ease of Doing Business rankings.
Kerala
‘God’s Own Country’ Kerala is home to an emerging startup ecosystem, with the highest number of startups out of all the states on this list. The state’s more than 3,100 startups have raised over $93 Mn in funding.
Incidentally, Kerala was one of the first states to introduce a policy for startups when it did so in 2014. The state has become a hub for hardware startups through The Maker Village, a joint venture between the Ministry of Electronics and Information Technology (MeitY), the Kerala government and the Kerala Startup Mission (KSUM). Recently, the state government announced an INR 250 Cr venture capital fund (VC fund) to promote startups.
Kerala had a strong showing in the States’ Startup Ranking 2021, where it was the best state among the ‘Top Performers’ for the third time in four years.
Odisha
The eastern state of Odisha is home to more than 1,334 registered startups, with the capital city Bhubaneswar being an emerging startup hub. Some of the state’s notable startups include Milk Mantra and Lecturenotes.in. The state’s startups collectively raised $28 Mn between 2014 and H1 2022.
Like other states on the list, the Odisha government also launched the Startup Odisha portal for all things startup. It also has a state-focused startup policy. In 2019, the state government launched the INR 100 Cr Odisha Startup Growth Fund (OSGF) to fund seed-stage startups in the region.
The state ranked among the ‘Top Performers’ in the States’ Startup Ranking 2021, alongside the likes of Kerala, Maharashtra, Telangana and Jammu & Kashmir.
Goa
Goa is the last emerging startup hub on the list for which exact funding data is available. The state has over 75 startups which raised $12 Mn between 2014 and H1 2022.
Goa government launched its startup policy in 2017 to create 100 startups and 5,000 jobs. The government also launched the Goa IT Policy in 2018 to have more IT companies come and set up shop in the coastal state.
In the States’ Startup Ranking 2021, Goa was adjudged to be a ‘Leader’, alongside seven other states and union territories.
Assam
The northeastern state of Assam is home to more than 160 startups, with Guwahati ranking among India’s emerging startup hubs. However, the funding data for Assamese startups is currently unavailable.
In 2017, Assam launched its startup policy in partnership with ‘Invest India’ to foster its startup ecosystem. The state followed that up with the launch of ‘The Nest’, a startup incubator, in 2019.
Assam also has several outreach programs involving academia, investors and other key ecosystem players to foster entrepreneurship.
According to the States’ Startup Ranking 2021, Assam was placed among ‘Leaders’, alongside seven other states and union territories.
Jammu & Kashmir
The newly-formed union territory of Jammu & Kashmir completes the list of emerging startup hubs in India. With Srinagar as its epicentre, J&K’s startup ecosystem boasts 84 registered startups.
In 2018, when Jammu & Kashmir was a state, the government launched its startup policy and also set up a support mechanism for women-led startups, along with a grievance redressal mechanism for startups. The government also launched an angel investor network for funding startups in the region.
In the States’ Startup Ranking 2021, J&K was ranked among the ‘Top Performers’, alongside Kerala, Odisha and Telangana.
India’s Startup Ecosystem Reaching Every Nook And Corner Of India
With almost 80 startups being registered every day, India is set to reach the psychological mark of 1 Lakh startups by 2025, according to the Inc42 report. The government is bullish on taking India’s startups to the grassroots level in the country.
In his address to the nation from the ramparts of the Red Fort on this Independence Day, Prime Minister Narendra Modi said that youth from Tier 2, 3 cities are behind the success of India’s startup ecosystem. “These are our youngsters who are taking on the world today with new innovations,” he added.
According to the Department for Promotion of Industry and Internal Trade (DPIIT), almost 50% of Indian startups are registered in a Tier 2+ city, which shows the rapid dispersion of the Indian startup ecosystem across all states and union territories.
Currently, India has no unicorns based out of a Tier 2+ city. However, that is set to change as nine of India’s 103 soonicorns are from Tier 2+ cities such as Jaipur and Patna. With the Centre and state governments encouraging and promoting startups, the number of startups coming from smaller cities in the country can only increase from here.
