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Top 5 Emerging Cities for Startups

Having an idea is not enough. It doesn’t matter how strong your entrepreneurial skills are, one important factor which abruptly decides the success of any start-up is LOCATION. Various studies have proved that the success of your business depends very much on two factors: 1) where you start and 2) from where you run your business.

India is progressing towards becoming a nation of entrepreneurs and start-ups as envisioned in the current initiatives and policies of government. There are number of disruptive start-ups taking place in India, for instance 3100 start-ups in 2014 to a projection of 11,500 in 2020 (NASSCOM and Zinnov’s “Tech Startups In India: A Bright Future” Report of 2014). Now, employers are forced to hike the salary of executives due to fear that they might leave the company to start something of their own.  Thanks to the governments ‘continuous effort’ and ‘venture investors’, now the gridlock has been broken. This is a revolution and it has potential to disrupt the market. Several steps have been taken by the government to make most of the cities investor and start-up friendly. Bangalore, Delhi-NCR, Hyderabad, Mumbai and Chennai are among the top traditional destinations favored by entrepreneurs. However, the high real estate cost, tough competition and higher wages of manpower in these cities have turned the new generation entrepreneurs to look into the medium size cities. The internet technology has motivated these disruptive business creators to opt for these cities where they can save money to utilize it in expanding their business ideas.

A basic comparison has been done among emerging cities to find out some of the best Tier 2 cities in India for start-ups. The comparison mainly was done on two criteria –  a) Market rate of commercial office spaces and b) Incubation centres available in that city. 

a) Market rate of commercial office spaces ( 500 sq.ft)  


We have found that in terms of evaluating the office space cost – Coimbatore and Kochi are the most affordable destinations. Ahemadabad and Pune are costlier than other three mentioned cities due to presence of IT industries and better infrastructure. For instance, Pune has a number of IT and software companies like TCS, Infosys, HCL, Tech Mahindra, Oracle, etc. However, in recent years Bhubaneswar has emerged as lucrative destination for startups.


b) Availability of incubation centres


Ahemadabad stands taller among all the mentioned cities due to a network of efficient management and angel funding and much needed guidance provided by CIIE – Centre for Innovation, Incubation and Entrepreneurship. CIIE is a brain child of IIM A and it provides not only a guided funding (both from corporate houses as well as government) but also helps to make right decision.

Regarded as the “Manchester of South India”, Coimbatore has in recent times have become ‘the ‘place for entrepreneurs. It is expected that the city will witness a growth of 130% of start-ups in the coming five years. It has around 500 start-ups and new ideas are flickering almost every nook and corner of the city which therefore attracts investors.Around, 13 start-ups have been selected in NASSCOM’s 10,000 Start-up Program. Lyriclabs (which is now the largest company in translation services in the world), Surya Power Magic (in manufacturing), Realworks (a media-tech start-up focussing on 3D visualisation and animation) etc are some of the famous startups based out of the city.

Mainly research and technological start-ups are growing in Bhubaneswar. 

NASSCOM has preferred Pune as their ‘next favourite destination’ for start-ups. It does not only have reputed academic institutes but at the same time has become a place where innovative ideas are celebrated. Around 180 start-ups from the city have been selected under NASCOM 10,000 Startup Program. The city has one of the most consistent start-ups environments in the country. 21% of product start-ups are from this city. Some of the famous start-ups to emerge from the city are- Druva Software, TastyKhana, Mobikon, FirstCry, MyExamBox etc.

Kochi has emerged from a place of tourist attraction it has leapt on to become a destination for entrepreneurship. A NASSCOM report on Tech Start-ups in the country has listed Kochi as the next promising destination in Kerala for start-ups. However, mostly start-ups of software products that are making their way into the start-up market in the city. Some of the famous startups based out of the city are- Mindhelix (which has come up with a way to use old smart phones and has raised $100,000 from crowd funding), Exploride (is developing a display system for cars) etc.

It seems like although the emerging cities have a long way ahead but as of now they have managed to put up extremely coherent environment which helps entrepreneurs to start their businesses. 


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