Watch out for the start-ups from Tier2 & Tier3 Indian cities !

Watch out for the start-ups from Tier2 & Tier3 Indian cities !

Posted by P. Charitha on November 17th 2017

India’s startup culture is booming in small towns! According to a report published in the Quartz, startup ecosystems are mushrooming in tier 2 and tier 3 towns, and the likes of Jaipur, Ahmedabad, Indore and Kochi are emerging as new hubs.This is mainly due to thepresence of incubators and tech parks. A fifth of India’s startups are now to be found in such cities, and in  a report published by IT industry lobby Nasscom and consulting firm Zinnov shows, these cities accounted for around 16% of Indian start-ups in the year 2016.And despite operating in places away from the traditional hubs, startups working across healthcare, education, agriculture, energy, and others have received enough attention from investors. Around 20% of all venture capital investments made between July and September this year went to firms in tier 2 and tier 3 towns, shows data from LetsVenture, a platform that connects startups with investors.
 “If you don’t have significant tech talent requirement, and if you’re a B2C (business to consumer) company, basing your company out of a smaller town might be better...expenses are low,” Harshil Mathur, co-founder of payments gateway startup RazorPay, told Quartz. Razorpay was incorporated in Jaipur in 2013, but shifted to Bengaluru two years later since most of its customers and prospective clients were there.
Read what Google India is doing to support Tier 2 city start-ups:
Smaller cities also have close-knit startup communities which help entrepreneurs find their first set of customers more easily, added Mathur. But the one struggle a startup operating from a small town could face is attracting niche talent, several entrepreneurs told Quartz. “Role models have already been established, which shows that scalability is possible from a tier 2 city,” Anurag Jain, co-founder and COO of Jaipur-based Girnarsoft, the parent company of CarDekho, told The Economic Times last year. “Talent acquisition still remains a major challenge in these markets,” he said.
Also read Kakatiya Sandbox for Tier2 entrepreneurship in Telangana:
The big lure of these smaller cities includes low manpower cost, cheaper real estate, and more affordable amenities. This allows young companies to do more with their limited budgets and stay bootstrapped longer.Source: The Quartz
Also read HDFC’s $30 Million startup Fund to boost start-up ecosystem in India: 


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