Powai is fast emerging on the startup landscape in India. It’s just next to Bangalore and Hyderabad in terms of startups and incubation. You can judge the entrepreneurship in the air of Powai valley and you will find young age people dropping the names of Sequoia capital and seedfunds in restaurants and bars. And why not it has given birth to few well-known startups Big Basket, TinyOwl, CredR, Snapdeal and many more. Startup culture has firmly taken its root during the last 4-5 years.
The Powai advantage
CredR founder Sumit Chazzad said to XING Magazine, “IIT Powai has played an important role and ecosystem is really healthy. Another good thing is that successful entrepreneurs honestly guide new kids on the block.” CredR, an online second-hand bike marketplace platform, went to Kunal Behl with its prototype and Kunal Behl decided to support the idea.
In a sense what Stanford University did for Silicon Valley; IIT is doing the same for Powai. You can say that what Noida is to Delhi, Kormangala is to Bangalore, Powai is to Mumbai. Being a suburb of the financial capital of India is another advantage. Money is pouring from investors such as Matrix Partners, SoftBank, and Nexus Venture Partners.
But the growth of Powai as India’s startup hub is not a planned one, it’s more has happened by chance. Sasha Mirchandani, managing partner of VC firm Kae Capital and co-founder Mumbai Angels, consider it’s a cluster effect. Mirchandanai has poured money in Squeakee.com, a technology company Shopsense, and Palet.ly like e-commerce website.
IIT Bombay has produced an impressive list of alumni which includes Ola, Housing Toppr, and TinyOwl. Their success has inspired a whole lot of entrepreneurs to chart out startup journey. Compared to many other metropolitan cities Powai has good infrastructure.
“I have seen a shift in inclination of my class from going after ‘fat salary’ jobs to entrepreneurship,” says Prof Milind Atrey, professor-in-charge of SINE (Society for Innovation and Entrepreneurship), IIT Bombay, said while talking to a startup news portal techinasia.com.
The startup culture is so good here that students just don’t want to leave the place. Students even flunk year just because they want to continue the city. This Is the situation the residency cost is almost three times more than the average cost of Gurgaon and Bangalore.
Challenges and dilemma
The average rent of residency is almost three times that of India’s two other big startup cities, Bangalore and Gurgaon. This has a cascading effect.
From groceries and transport to rentals, everything is extremely expensive here. It makes the life of startups tough.
This is why both startups TinyOwl and Housing.com laid off around 600 employees to sustain operations. It has high-level of fixed costs in terms of salaries and rentals so when business is on slide, Powai –based startups are worst hit.
Obviously, employees in Powai-based startups feel more insecure because of the high burn rate, but the lure of Powai also keeps them hooked with it.