Be it a food delivery service, fitness and wellness or an online grocery store, Bengaluru-based startups have mastered the art of wooing investors. The numbers are telling. This year so far, startups in Bengaluru have garnered $4.4 billion in 203 funding rounds, the highest across cities in India, according to data from analytics firm Tracxn.
The data reveals that Delhi-NCR (National Capital Region) based startups were next in line: raising $2.04 billion in 169 rounds during the same period. Startups based in Mumbai and Pune raised a total of $591.6 million in 151 rounds. Bengaluru and Chennai, together saw total investments of $4.68 billion in 235 rounds, between January and September this year. The data includes startups which were founded in 2008 and after.
“The jugaad startup infrastructure that was somewhat characteristic of earlier days in Bengaluru has ebbed and has been replaced by a more formal infrastructure for ventures to take birth and flourish: right from angels, mentors, venture capitalists (VCs), private equity (PE) investors, to media and research platforms and co-working spaces specialising in startups, to government machinery and policies,” says Sandipan Mitra, CEO and co-founder of HungerBox, a Bengaluru-based B2B food-tech startup. In July this year, HungerBox raised $4.5 million from Neoplux, Sabre Partners, Lionrock Capital and Infosys co-founder Kris Gopalakrishnan.
“This is supported by a very open culture, great set of educational institutions, lifestyle options, and connectivity. It’s no surprise, that Bengaluru leads among cites in the startup world and is home to some amazing ventures,” Mitra adds. HungerBox is Mitra’s second startup headquartered in Bengaluru. His first venture HungryZone, an online ordering platform started in 2016, was later sold to UK’s Just Eat Group.
Among the key funding announcements this year for Bengaluru-based startups include: BigBasket raising $300 million in February in a funding round led by Chinese e-commerce giant Alibaba. In June, food tech startup Swiggy raised $210 million, making it the newest entrant in the coveted unicorn club. In July, healthcare and wellness startup Cure.fit announced $120 million funding led by existing investors IDG Ventures, Accel Partners and Kalaari Capital. According to the Tracxn data, the consumer sector is the most funded in the startup space in Bengaluru followed by financial services and enterprise applications.
Over the past decade, Bengaluru has built a buzzing ecosystem of startups, angel investors and venture capitalists, who have consistently contributed to the growing entrepreneurial culture of the city.
“A location’s ability to act as a magnet for startup capital is based on several factors. In Bengaluru’s case, what has clearly helped is the city’s ability to capitalise on the tremendous head start that began with IT services companies such as Infosys and Wipro in the 80s and 90s, international tech giants like Texas Instruments, IBM, Cisco setting up their captive development centres here, to BPO companies such as CustomerAsset, Progeon, and internet companies: Flipkart, BigBasket to a range of other mobile-tech and deep-tech based companies, now,” says K Ganesh, Bengaluru-based serial entrepreneur and partner at GrowthStory, one of India’s largest entrepreneurship platforms, which promotes and runs startups.
Ganesh feels Bengaluru’s cosmopolitan culture has added to the city’s thriving startup environment. “After spending decades in the U.S., many Indians have returned to Bengaluru and have built a vibrant mentor/angel investor ecosystem that helps Indian entrepreneurs learn from their experiences in the U.S. markets. We call this B2B (Bay area-to-Bengaluru) phenomenon.”
According to the Nasscom Startup report released last year in November, Bengaluru, Delhi and Mumbai were among the top startup hubs in India. Total number of technology startups in the country is estimated to be about 5,200, the report noted.
“The city (Bengaluru) is still a hotbed of tech and non tech talent. Apart from the usual suspects of climate, still affordable real estate, the only dampener that Bengaluru needs to work on is its infrastructure,” says Vinamra Pandya, founder and CEO, Qtrove, an online marketplace for curated organic food, personal care, and home décor products. In May this year, Bengaluru-based Qtrove raised Rs 350 crore from Springboard Ventures, the investment arm of Bennett, Coleman & Co Ltd.
Despite Bengaluru’s infrastructural challenges and the usual teething issues of starting a venture, Ganesh is optimistic of the city’s startup future. “I don't see Bengaluru’s lead fizzling out any time soon.”