Has Hyderabad overtaken Bangalore as a preferred startup hub? The debate has started gaining momentum of late due to strong pick up in the number of startups in the city of Charminar. Hyderabad is trying hard to match up with Bangalore as the most preferred Indian startup city. There is a real sense of feeling among administrators, incubators, political class and business persons to take advantage of the ongoing startup boom. They don’t want to miss the bus this time.
In the last year September 2015, NASSCOM reported that close to eight percent of total startup activities are taking place in Hyderabad. Based on the rate of growth many experts are pointing out that in a couple years from now the city will leave behind the Bangalore (Bengaluru) startup ecosystem.
Startup incubation center T-Hub has started functioning as a catalyst to promote the startup ecosystem. It acts as a one stop center to get advice, mentorship, funding and infrastructure. It has tied up with NASSCOM, CIE and others to incubate startups,” says Ajit from T-Hub to reputed startup news portal.
All this sounds great and exciting but does this essentially mean Hyderabad is becoming the preferred startups hub for entrepreneurs. Lets move this debate forward on th basis of different parameters to make an unbiased comparison:
This is a real problem in Bangalore. The city is really choked with pathetic transportation system. The roads are narrow which is the real problem. Travelling 8-10 kilometers takes around 1-2 hours. Hyderabad transportation, in comparison, is better. The power scenario is also better compared to Bangalore.
Another thing is that leasing office space in Hyderabad is cheaper than Bangalore, Powai and Pune. According to DTZ Global Occupancy Report 2013, Hyderabad has replaced Surabaya(Indonesia) as the least expensive market. Bangalore and Powai have most expensive office spaces.
Incubations centers and venture capital ecosystem
Bangalore has a much better startup incubation and venture capital ecosystem than Hyderabad. It’s home to top incubators such as AngelPrime, Axilor, Alphalab, Khosla Lab, IIT-B, T-Hub, GSF and Jaaga, Seedfund, Techhub and more. Hyderabad has started catching up after coming up of T-Hub incubation center.
Founder of CMSINABOX, a cloud-based CMS company in Startup village of Vizag, George Thomas Johnson says, “Hyderabad is fast emerging on the startup landscape. But Bangalore enjoys a high-level of reputation among VCs. It’s easier for a Bangalore-based company to get investment compared to Hyderabad. Bangalore has become synonymous for technology-based startups. It will take a high-level of concerted effort for Hyderabad to catchup with Bangalore as a top startup hub in India.
According to a news report in Techinasia.com, Bangalore ranks sixth in the world in term of receiving access to getting venture capital funding. Only Silicon Valley, New York, Boston, Los Angeles – and Tel Aviv in Israel are ahead of Bangalore in this regard.
Bangalore is the only city apart from Singapore in Asia to get a position in global top 20 in terms of startup exit valuations. It has grown three times compared to 2012. The city is second only to Berlin in the Global Startup Ecosystem Growth Index.
The position of Bangalore as a premier startup hub in India was reinforced by the success of Flipkart, InMobi and MuSigma. These all companies have entered in the unicorn club. Hyderabad has still to see such kind of success.
Bangalore has always enjoys as a most important education centers in India. There are more institutes of national significance in Bangalore compared to Hyderabad. Therefore, when IT boom started, Bangalore picked up fast because of availability of huge number of software manpower.
Government policy in Bangalore has remained industry friendly and political climate has been quite peaceful. Hyderbad,on the other hand, lost a lot of opportunity because of the Telangana movement. In between, Bangalore firmly established its brand as a technology capital of India in world. How Chandrashekhar Rao government works to create a congenial atmosphere is to be seen.
Bhavish Aggarwal, Founder Ola Cabs, says, “Talent is very much important to succeed. He stressed that after moving to Bangalore, they found it easier to set up a solid tech team that helped them to scale up fast. It was not at all possible in Mumbai.”
The startup ecosystem is not just about money, capital and technology. It’s about so many things. It’s also about various unrelatedi nterconnecting dots. Bangalore is much stronger in terms of brand reputation currently. This does not mean Hyderabad has no chance, but it has to show willingness of every stakeholder to achieve the feat.