 "Bengaluru improves ranking among global startup ecosystems")
Piggybacking on high exit volume growth rate and venture capital (VC) investments, Bengaluru has improved its place by four in the Global Startup Ecosystem Ranking by Silicon Valley-based startup Compass, a provider of automated reporting and benchmarking software for 34,000 startups and tech companies around the globe. It is the only Indian city to be featured in the list.
The ranking has reinstated the city’s position as the startup capital of India.
Bengaluru has improved its spot from 19 in 2012 to 15 this year and has come a long way from an IT outsourcing destination to the haven of entrepreneurs, especially in the technology startup space, in India.
The Compass report said Bengaluru harbours about 3,100 to 4,900 active tech startups and has achieved the second highest growth rate for exit volume and VC investment among the top 20.
“Recent success stories such as Flipkart and InMobi are part of the unicorn club with valuations beyond $1 billion. Their success helps recirculate wealth and expertise back into the ecosystem. This in turn increases the attention of the international investor community who are eager to find high potential, under-valued new startup,” the report said.
Bengaluru’s claim to fame is backed by the inflow of venture capital (VC) in 2014. According to the report, the city saw about $2.25 billion-worth funds flowing in and is ranked seventh in VC investment among the top 20.
The startup ecosystems with the fastest annual growth in the number of seed rounds over the last two years were Bengaluru (53%), Sydney (33%) and Austin (30%). The ecosystems with the most growth in VC investments were Berlin (12x), Bangalore (4x), Boston (3.7x), Amsterdam (2x), and Seattle (2x).
The tech city, often called the Silicon Valley of India, shines with a median age of 28.5 years and is home to the youngest entrepreneurs in the Asia-Pacific region. This is 12% and 21% below the regional and Silicon Valley averages, respectively.
Though the data revealed that Bengaluru-based startups take the second lowest time to hire, the average quality of the local talent is not yet on par with the elite startup ecosystems around the world. Hence, the ‘solid pipeline of cost-efficient talent’ with software engineering salaries that are below $40,000 annually has been ranked at 17 among the 20.
Another feature of the city’s startups is that unlike its global counterparts, most of these targets the local market in the country.
In terms of ratio of employees with previous startup experience, Bengaluru is ranked at 12. Compared to Silicon Valley, this ratio is 15% lower and the number of advisors are 59% lower.
According to a city-based start-up, it is not surprise that Bengaluru fairs well among other cities in India when it comes to providing the right atmosphere for tech startups. For GazeMetrix, which relocated its base from Delhi to Bengaluru, it took about 500 interviews to hire for one position. “However, this is easier in Bengaluru. Finding young talents as well as safety concerns for women are problems in other cities in India. Bengaluru is comparatively safer,” said Saurab Paruthi, co-founder and chief operating officer of GazeMetrix. GazeMetrix is a solution that uses image recognition and machine learning technologies to identify image-based risks and opportunities.
For Barbara Maim, an expat from Switzerland and the chief executive officer of a community engagement app called Minsh in Bengaluru, there are two reasons why the city is pleasant for growing startups. “First, I wanted to taste the Silicon Valley of India. I have seen it evolving more and better towards the Silicon Valley. Additionally, a lower cost of living compared to Swiss.”
According to Microsoft Ventures India Director Ravi Narayan, the city is blessed with a natural context for startups compared to other cities in India. “The critical mass combined with the propensity to work in a start-up is crucial. You don’ find youngsters everywhere who are ready to work for start-ups. But this mentality is different in this city,” he said.
He added that a lot of people from the US, with background in startups and investor community, prefer returning to Bengaluru, over other cities. “The beginners are now coming back as mentors and investors to the start-up ecosystem. You won’t find this often in China. Hence, the city has also become the first port of call for start-ups from Australia, Singapore, Beijing, etc and brings in an undue advantage for Bengaluru,” he said.
The ranking has reinstated the city’s position as the startup capital of India.
Bengaluru has improved its spot from 19 in 2012 to 15 this year and has come a long way from an IT outsourcing destination to the haven of entrepreneurs, especially in the technology startup space, in India.
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The ranking has taken into consideration various parameters including performance, funding, market reach, talent and startup expereince. Silicon Valley leads the table followed by New York City and Los Angeles in the second and third positions, respectively. The other Asian startup ecosystems in the top 20 include Tel Aviv and Singapore, at fifth and tenth positions, respectively. However, the report doesn’t cover China, South Korea and Japan.
The Compass report said Bengaluru harbours about 3,100 to 4,900 active tech startups and has achieved the second highest growth rate for exit volume and VC investment among the top 20.
“Recent success stories such as Flipkart and InMobi are part of the unicorn club with valuations beyond $1 billion. Their success helps recirculate wealth and expertise back into the ecosystem. This in turn increases the attention of the international investor community who are eager to find high potential, under-valued new startup,” the report said.
Bengaluru’s claim to fame is backed by the inflow of venture capital (VC) in 2014. According to the report, the city saw about $2.25 billion-worth funds flowing in and is ranked seventh in VC investment among the top 20.
The startup ecosystems with the fastest annual growth in the number of seed rounds over the last two years were Bengaluru (53%), Sydney (33%) and Austin (30%). The ecosystems with the most growth in VC investments were Berlin (12x), Bangalore (4x), Boston (3.7x), Amsterdam (2x), and Seattle (2x).
The tech city, often called the Silicon Valley of India, shines with a median age of 28.5 years and is home to the youngest entrepreneurs in the Asia-Pacific region. This is 12% and 21% below the regional and Silicon Valley averages, respectively.
Though the data revealed that Bengaluru-based startups take the second lowest time to hire, the average quality of the local talent is not yet on par with the elite startup ecosystems around the world. Hence, the ‘solid pipeline of cost-efficient talent’ with software engineering salaries that are below $40,000 annually has been ranked at 17 among the 20.
Another feature of the city’s startups is that unlike its global counterparts, most of these targets the local market in the country.
In terms of ratio of employees with previous startup experience, Bengaluru is ranked at 12. Compared to Silicon Valley, this ratio is 15% lower and the number of advisors are 59% lower.
According to a city-based start-up, it is not surprise that Bengaluru fairs well among other cities in India when it comes to providing the right atmosphere for tech startups. For GazeMetrix, which relocated its base from Delhi to Bengaluru, it took about 500 interviews to hire for one position. “However, this is easier in Bengaluru. Finding young talents as well as safety concerns for women are problems in other cities in India. Bengaluru is comparatively safer,” said Saurab Paruthi, co-founder and chief operating officer of GazeMetrix. GazeMetrix is a solution that uses image recognition and machine learning technologies to identify image-based risks and opportunities.
For Barbara Maim, an expat from Switzerland and the chief executive officer of a community engagement app called Minsh in Bengaluru, there are two reasons why the city is pleasant for growing startups. “First, I wanted to taste the Silicon Valley of India. I have seen it evolving more and better towards the Silicon Valley. Additionally, a lower cost of living compared to Swiss.”
According to Microsoft Ventures India Director Ravi Narayan, the city is blessed with a natural context for startups compared to other cities in India. “The critical mass combined with the propensity to work in a start-up is crucial. You don’ find youngsters everywhere who are ready to work for start-ups. But this mentality is different in this city,” he said.
He added that a lot of people from the US, with background in startups and investor community, prefer returning to Bengaluru, over other cities. “The beginners are now coming back as mentors and investors to the start-up ecosystem. You won’t find this often in China. Hence, the city has also become the first port of call for start-ups from Australia, Singapore, Beijing, etc and brings in an undue advantage for Bengaluru,” he said.