Delhi vs B’lore comment in Eco Survey gets tech veterans’ goat

Bengaluru: A comment in the Economic Survey that Delhi has displaced Bengaluru as India’s startup capital has left sections of the southern city’s tech veterans displeased, and they have sought to counter it with data and their own insight.

The document says over the recent years, Delhi has replaced Bengaluru as the startup capital of India. “Over 5,000 recognised startups were added in Delhi while 4,514 startups were added in Bangalore between April 2019 to December 2021,” it says.

Biocon founder Kiran Mazumdar-Shaw said Bengaluru’s focus has never been on adding numbers, but creating unicorns of global repute. “In the startup world, it is not the quantity that matters, but their quality and the value they command,” she said.

“The right way to look at is how many unicorns a city has created and how much venture capital (VC) funding its startups are getting. It will be interesting to see the combined value startups in Bengaluru command compared to those in other cities,” Shaw said. Unicorns are startups that are valued at $1 billion or more.

Karnataka Startup Vision Group chairman Prashanth Prakash said the way the startups have spread across diverse sectors including biotech, space-tech, agri-tech, fin-tech and edtech makes the city’s startup ecosystem unique. Just a handful of fintech startups in Bengaluru, he said, were handling a major part of India’s digital transactions.

Prakash, who is also a partner at venture capital firm Accel, said the gold standards of corporate governance, integrity and transparency set by Infosys compel the city’s startups to raise their own standards, think big and scale high. “These factors are also a big influencer for venture funding. The kind of capital startups in Bengaluru attracts is perhaps almost equal to what other cities get put together,” he said.

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Infosys cofounder S Gopalakrishnan said: “My perspective is that we need to grow both the NCR and Bangalore ecosystems as well as other locations across India.”

Aarin Capital Partners chairman TV Mohandas Pai is happy that startup activities are picking up in the North. “What we need to understand is how many of them will actually grow and get funded. There are about 60,000-plus startups registered in India, but only about 12,000 of them are funded. There is a difference; while many startups in Delhi are consumer-focussed, most in Bengaluru have deep-tech components closely linked to what is happening around the world.”

The former Infosys director added: “Having said that, our political leaders should see the reference in the survey as a wake-up call, and take urgent steps to fix things on issues Bengaluru is battling.”

Karnataka’s IT/BT minister CN Ashwath Narayana felt the numbers indicate just one facet of the startup ecosystem. The vibrancy comes from a combination of factors like opportunities for funding, availability of talent pool, sustained focus to produce disruptive technologies, etc. It is these factors that have placed Bengaluru among the global startup hubs, he said.

The city, the minister added, is home to 34 unicorns, making up 40% of India’s share, and 25 of them emerged between April 2019 and December 2021. The city’s startups command more than 55% of India’s unicorn valuation, and the tech capital is home to three out of India’s four decacorns.

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