Welcome Guest

Home Article Features Ecosystem  Bengaluru: Home to India's best tech start-ups

Bengaluru: Home to India's best tech start-ups

Tech start-ups are leaving their native cities for Bengaluru that offers best ecosystem for tech companies.

Tags: Bengaluru, technology startups, tech entrepreneurs, online payment, e-commerce, instamojo, Ola Cabs, freecharge, growth funding, iSpirt, just dial

BY Sandeep Soni  |  Feb 25, 2015 comments ( 0 ) |

The evolving start-up ecosystem in India is largely tech focused. According to a Nasscom report, 800 new tech start-ups are sprouting in a year, adding to the existing base of 3,000 or above growth hungry tech start-ups. These start-ups are leaving their native cities for Bengaluru that offers best ecosystem for tech companies.

Starting a tech start-up has become relatively easier in India primarily in cities like Delhi/NCR and Mumbai given a host of support structures available there. However as these start-ups move beyond early-stage or Series A funding, it’s difficult for them to find premium quality tech talent in these cities. As a logical move, these tech start-ups are shifting to Bengaluru.

“Start-ups believe if they are growing rapidly post Series A or B, then the odds to find good tech talent is better in Bengaluru as compared to other cities. This is because of the large technology campuses in Bengaluru. Thus, from a training perspective, it is probably easier to find the talent there,” says Karthik Reddy, Managing Partner, Blume Ventures.

Making the Right Move

Reddy and a chunk of angel investors put in $250k in online payment collection start-up Instamojo in early 2013. Started in 2012, Instamojo along with its less than 30-people team shifted from Mumbai to Bengaluru last month to hire people on tech and engineering side. “We are looking to hire around 70 people in one year. There was not enough talent pool available in Mumbai, so we decided to shift to Bengaluru,” says Akash Gehani, Co-founder, Instamojo.

Many other tech start-ups have either shifted to Bengaluru or are currently underway, including online mobile recharge start-up FreeCharge, online taxi booking platform Ola Cabs, online classifieds portal Quikr, mobile ad network InMobi, broker-free house renting platform Grabhouse, etc. with expanding tech talent as the prime reason. Hector Beverages that manufactures Paper Boat and Tzinga brand ethnic Indian drinks also shifted to Bengaluru from Gurgaon with the setup of its new manufacturing unit in Mysore.

“We have set up a new unit in Mysore that is three times bigger than Manesar (near Gurgaon) unit to produce coconut water. So we decided to have our headquarters near that and Bengaluru was the right place,” says Neeraj Kakkar, CEO, Hector Beverages.

Kunal Shah, Co-founder, FreeCharge, says, “We moved to Bengaluru two years back since we couldn’t get enough talent for tech and product in Mumbai. We have grown dramatically 10 times in the last year alone and will continue to grow at the same rate.”

Cheaper Talent

The cost of talent acquisition in Bengaluru may be equal to Delhi/NCR and Mumbai but certainly not cheaper. “Talent in Bengaluru, on an average, is probably more expensive than Pune, Hyderabad, Chennai and definitely not less costlier than Delhi or Mumbai, while the cost of living in Bengaluru being arguably little cheaper,” adds Reddy.

However, there will be soon a time when cities like Delhi and Mumbai will develop their own tech talent pool. Currently, companies like Mumbai-based Housing.com, Delhi/NCR-based MakeMyTrip, Naukri.com, Jabong.com and Yatra.com have developed their large talent pools.

“Housing.com has been able to sustain itself in Mumbai because its co-founder himself is the core member of its tech team. So, having technical co-founder helps businesses in hiring tech talent in cities like Delhi and Mumbai, otherwise the chances of building tech team get better in cities like Bengaluru, Pune and Chennai,” says Sharad Sharma, Co-founder & Governing Council Member, iSpirt.

Real Estate Pinch

Not just talent crunch, it is also the high rent and real estate prices, particularly in Mumbai, which pushes start-ups to move to Bengaluru. Also, Bengaluru has a much more robust ecosystem in terms of number of start-ups, investors and tech-savy people.

“Bengaluru has cheaper real estate than Mumbai and Delhi that directly affects the cost of everything. People in Mumbai expect more salary because of city’s expensive lifestyle. Also for women, Bengaluru is comparatively safer than Delhi,” says Pankhuri Shrivastava, Co-founder and CMO, Grabhouse.

If all start-ups have to move, given their need for talent, it is wise to move when it has 8-10 employees as it is not easy to shift when the company has grown bigger in size. “However, you can also move if you are a listed company as you have lot more capital to afford shifting like Just Dial whose large part moved to Bengaluru after its IPO,” says Reddy. But that involves losing whole bunch of talent and friction that time. This is not there in a start-up stage and so it is easy to move.

Please add your comment

Not readable? Change text. Enter the characters as seen on the image (case insensitive)
  Notify me of follow up comments via e-mail   Subscribe for daily newsletter

Related Articles

IIMs entrepreneurial grads

BY Entrepreneur

IIM grads have beaten the common belief that finance and marketing are the sectors for them, choosing every other possible sector and managing them...

Why Women are Better Entrepreneurs?

BY Entrepreneur

Recently a study by FICCI’s ladies organization (FLO) has found that women entrepreneurs face an uphill task when it comes to starting their ...

Small Business in India

BY Ritu Marya

Today 95 per cent country’s industrial units come under Micro, Small and Medium Enterprises (MSME). This sector has around 128.44 units (prov...

Time to Walk the Talk

BY Entrepreneur

A high level task force was set up last year under the Chairmanship of T.K.A Nair to recommend effective measures for the overall development of th...

Education: No Bar, Success: Baar Baar

BY Entrepreneur

It is not the academics that decide one’s success at business but the determination to succeed, the will to work hard and the guts to face ad...

Green with Pride

BY Entrepreneur

Going green is in vogue these days! A survey conducted by Ernst and young recently showed that companies worldwide are likely to spend 70 per cent ...

Enter the ecosystem

BY Entrepreneur

Why do 90% of startups fail within less than two years of starting up? Their ideas are brilliant but they fall sick because of lack of proper guida...

Buzzing Helpline for Enterpreuners

BY Arindam Ghosh

Entrepreneurs are now just a phone call away from getting assistance from the government towards helping them in setting up their own business vent...

Upcycling CWG waste for environment cons

BY Entrepreneur

We have often heard the phrase, “Good riddance of the bad rubbish”, how about turning the tables for once and accept the rubbish and re...

SMEs and Crime

BY Entrepreneur

What’s more, without any proper regulatory body the tentacles are alarmingly growing. Don't you think, it’s about time; we take a stock of...

CWGs waste management

BY Entrepreneur

Further, the Games signage supplier, Signage India Pty Ltd sold this flex banners and billboards which is made of polyvinyl chloride or PVC to Cons...

FISME’s Pre- Budget Wish list for FM

BY Entrepreneur

FISME has put out its wish list for the MSME Ministry and the Finance Minster to look over and react upon. It covers major issues like GST, PMEGP,NSIC...