Bengaluru: A Unicorn Generating Platform!

“Bade se bada dhanda, paise se nahi, ek bade idea se bada hota hai”    - Dhoom 3

Now, picture this: With this mantra in your mind, you're stepping into a city that's practically buzzing with opportunity— an ecosystem pulsating with huge investment and a proactive government.
Sounds like the perfect stage for your game-changing idea to take off, right?

Well, this isn't just a dream but a reality for startups in Bengaluru.

According to the Global Startup Ecosystem Report 2024, Bengaluru has rocketed to the 21st position globally in terms of having a superb startup ecosystem.

Don't believe us? Have a look.

The report states that Bengaluru's tech scene has more than 80% of India's global IT offices. And its software exports are valued at nearly ₹6.3 lakh crore. You didn't know this, did you?

It revealed that the city has also attracted venture capitalists and fostered a thriving startup environment.

It contributes 40% of India's IT exports and has produced 43 unicorns, including some popular companies like Cred, Zerodha, Flipkart, PhonePe, and Big Basket. 

Out of India's 1500 Global Capability Centers (GCCs), Bengaluru itself is home to over 400. It employs 13 lakh workers and contributes around ₹2.81 lakh crore to the economy, ~1% of India's GDP, as per Startup Genome's Global Startup Ecosystem Report.

These numbers clearly justify the city's entrepreneurial spirit while creating an ideal ecosystem for start-ups to grow successfully.

So, the city is more than just the "bridge of all pains." Keeping its reckless traffic aside, the city remains an ideal choice for many global giants like Accel and General Atlantic to invest and establish their offices.

Bengaluru's Story Behind IT Success

Have you ever wondered how Bengaluru turned into India's software industry? From humble beginnings to becoming a global tech powerhouse, this city has come a long way. Here's a closer look at the factors that fueled its rise as the nation's IT hub.

a. The Education Powerhouse

Long before IT became a global industry, Swami Vivekananda and Jamsedji N Tata envisioned a future where India thrived on scientific and technological advancement.

Their vision led to the establishment of the Indian Institute of Science (IISc) in 1909, a key institution in Bengaluru's rise as an engineering and tech hub.

b. Early Foundations: Government Investment in the 70s

In the 1970s, the Indian government made significant investments in Bengaluru's tech sector, attracting global giants like Texas Instruments and International Business Machines (IBM) to set up operations.

These early moves laid the groundwork for the city's future as a tech hub.

c. Skilled Workforce & Government Support Drive Growth

By the 1980s, Bengaluru saw a boom in the IT industry thanks to a highly skilled workforce (contributing to 25% of India's digital talent).

The Indian government's supportive policies and strategic investments fueled the sector's rapid expansion.

d. Strategic Location & Infrastructure

Bengaluru's prime location and world-class infrastructure turned the city into a global software outsourcing powerhouse.

The city boasts 30 SEZs (Special Economic Zones) and numerous IT parks that nurture tech innovation.

e. A Hub for R&D & Multinationals

With over 400 R&D centres, including major multinationals, Bengaluru became a critical node for research and development.

Global tech leaders have established bases in the city, bolstering its status as a key tech player.

Did you know that the city has big companies like Wipro, Infosys, and TCS, and there are over 10,000 startups today? According to a report by Hirist.tech, the tech industry here is expected to grow to $250 billion by 2025.

Factors Fueling Bengaluru's Rise As An Investment Hub

From having several unicorns to a thriving ecosystem, here is your answer to what exactly attracts global investors:

a. Move Over, Silicon Valley. Meet Bengaluru!

Also known as the "Silicon Valley of India", Bengaluru just doesn’t attract investors because of its "Tech Park" but also because of its top-notch innovation, a massive pool of engineers, and a never-ending supply of startup founders. 

Trust me, these founders will make you believe that they have just cracked the next billion-dollar idea.

As per a report by the Department of Electronics, Government of Karnataka, the city has 45 of the country's 118 unicorns, including Ola, Swiggy, BigBasket, MoneyView, Rapido, LivSpace and many more.

b. Galore Of Affordable Talent

Who doesn't want employees with new, fresh minds & lower salary expectations? Highly skilled coders here are willing to work at a fraction of what they would get in other parts of the world.

For instance, a skilled software engineer from an MNC in the US might earn around ₹70 to ₹90 lakhs a year, while in Bengaluru, the same talent could work for a startup at just ₹15 lakhs a year.

For investors, that's a 'massive' difference in cost while still getting top-notch tech expertise.

Global investors be like 👇

c. Vibrant Ecosystem

Let's be honest, startups in Bengaluru are making things better, thanks to the city's vibrant ecosystem.

Investors can't resist the chance to be part of the next significant' innovation,' especially when it's in Bengaluru, a city known for its productivity and creativity. Here's the proof:

As per Startup Genome, the 2023 Bengaluru Tech Summit, one of Asia's biggest integrated technology conclaves, showcased over 600 exhibitors and launched 37 tech products!

So, why settle for boring when you can have a startup ecosystem full of potential IPOs and unicorns?

d. Good Government Incentives

The Indian government has been handing out incentives like candy to start-ups in Bengaluru. Two major aspects the start-ups enjoy:

• 80IAC exemption (offering a 3-year tax break within the first 10 years)
• Skill development & training courses

Through Karnataka's start-up policy 2022-27, the government is developing a holistic approach towards strengthening the start-up ecosystem. The policy aims to stimulate the growth of up to 25,000 startups and increase the number of high-growth startups.

So, saying no to such a smooth ride when there's money at the end of the road could be a terrible idea, isn't it?

e. Booming Market

You might be shocked, but Bengaluru is not just about tech-savvy service providers. It also has young, gadget-obsessed customers, perfect for any investor looking to scale big time.

Since everyone in the city seems to be working on solving some problem (while sipping overpriced coffee), there’s always room for something 'new' to sell.

According to a report by Statista, Bengaluru Urban District's per capita Net District Domestic Product (NDDP) was approximately ₹7,60,000.

f. The Perfect Networking Picture

If you've ever been to a startup event in Bengaluru, you must know that it's not just an event but a carnival of networking. Investors can easily find new opportunities while enjoying bites of gourmet finger food.

Because who wouldn't want this? It's all part of the charm.

In 2020, Bengaluru attracted more than ₹74,000 crore in venture capital investments, surpassing London and San Francisco. And, you know what? The total funding raised in 2024 is over ₹11,000 crore.

Did you know that Krutrim AI, by Ola's founder Bhavish Aggarwal, raised $50 million in funding at a $1 billion valuation and is now India's first AI startup to reach unicorn status?

It wouldn't be wrong to say that Bengaluru has been popping out start-ups that have grown into successful companies making crores. Don't believe us? Have a look at the list below!

Bengaluru-based Start-Ups You Already Know:

1. Flipkart

Started as an online book store in 2007, Flipkart is the brainchild of Sachin Bansal. This Indian eCommerce store has revolutionised the e-retail industry in India. Flipkart Internet, its marketplace arm, reported revenue of ₹17,907 crore for 2023-24.

2. PhonePe

Launched in 2016, PhonePe Group is India's leading fintech company with its flagship digital payments app. For FY23-24, it reported revenue of ₹ 5,064 crore, representing 74% top-line growth from FY22-23.

3. Big Basket

Yes, our next stop-destination to order groceries at home is based out of Bengaluru. Founded in 2011 by VS Sudhakar, Hari Menon, VS Ramesh, Vipul Parekh, and Abhinay Choudhari, it has reported a modest 6% year-on-year growth in its operating revenue for FY24 to ₹7,885 crore.

4. Zoom Car

This startup turned out to be India's first company to focus on self-drive car rental. Launched in 2012 by David Back and Greg Moran, the company helps people rent cars on an hourly and per-day basis.

The company, which reported operating revenue of around ₹69 crore in 2023, currently operates in over 15 cities, including Bengaluru, Mumbai, Chennai, Delhi NCR, and Pune.

5. Zivame

Founded by Richa Kar and Kapil Karekar in 2011, Zivame is an online lingerie store featuring hundreds of styles of intimate wear for women.

It is India's leading online lingerie platform and in 2022-23, Zivame recorded a 150% revenue growth. Yes, it has its roots in Bengaluru.  

6. Groww

India's leading digital investment platform, Groww, was founded in 2016 by Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal.

Groww's revenue for the financial year 2023 was reported at ₹1,294 crore, a 252% increase from the previous year. Whooooo!

7. Cred

If you own a credit card, you must have heard about CRED! Founded by Kunal Shah in 2018, this credit management and bill payments platform has made a lot of lives easier.

Its revenue was ₹1,484 crore in 2023, with over 13 million monthly active users. Its FY24 revenue surged 66% to ₹2,473 crore.

The Bottom Line

If you're looking to chase the next big thing, Bengaluru is like a treasure hunt with a high chance of finding gold (or at least a decent IPO)!

From tech giants to disruptive fintechs, Bengaluru is home to some of the world's most exciting and scalable startups.

As international investors continue to pour billions into these emerging companies, the question is: which other cities do you think have the potential to become as big as Bengaluru?

Drop your thoughts in the comments.