The Delhi-NCR region now counts more startups and unicorns than Bengaluru and Mumbai, says a report released by TiE Delhi-NCR and consulting firm Zinnov on Tuesday
With suitable govt interventions, Delhi-NCR could become one of the top 5 global startup hubs, says report
New Delhi: Move over, Bengaluru and Mumbai, Delhi-NCR is the newest hotspot for startups and unicorns in India.
The region that comprises the national capital and adjoining cities of Gurugram and Noida now counts more startups and unicorns than Bengaluru and Mumbai.
Delhi-NCR is home to 10 unicorns, or those with a valuation of at least $1 billion, with at least one added each year since 2013, compared with the nine and two unicorns that Bengaluru and Mumbai had added, respectively, in the first half of 2019, according to the “Turbocharging Delhi-NCR Startup Ecosystem" report issued by TiE Delhi-NCR and consulting firm Zinnov on Tuesday.
A total of 7,000 startups were founded in Delhi-NCR since 2009, according to the the TiE-Zinnov report.
Bengaluru—considered India’s “Silicon Valley"—had 5,234 startups in the same period, followed by Mumbai with 3,829 and Hyderabad with 1,940 startups.
With 10 unicorns, the cumulative private market valuation of startups in the Delhi-NCR region is currently $46-56 billion, followed by Bengaluru at $32-37 billion followed by Mumbai at $10-12 billion. Some of the unicorns in the Delhi-NCR region are MakeMyTrip, Info Edge and Indiamart.
The pace of founding new startups has, however, slowed over the past two years across India, including in the Delhi-NCR region, according to the report. The reasons include lack of affordable co-working spaces, less number and quality of accelerators and incubators, shortage of technical talent, lack of seed and early-stage funding and low corporate participation.
Rajan Anandan, president of TiE Delhi-NCR, said accelerating growth of the ecosystem will require “a lot more seed and early-stage funding, creating more affordable co-working spaces, increasing the number and quality of accelerators and incubators, developing deeper pools of technical talent and developing sector-specific policies".
The report said that with suitable government and private sector interventions, Delhi-NCR could become one of the top 5 global startup hubs, with 12,000 startups, 30 unicorns and a cumulative valuation of about $150 billion by 2025.
Unlocking the true potential of the Delhi-NCR startup ecosystem would require focusing on several core areas including building “three world-class affordable startup hubs, one each in Delhi, Noida and Gurugram" along the lines of T-Hub set up in 2015 by the Telangana government. The report said there is a need to boost seed and early-stage investments in Delhi-NCR.
Another key area, the report says, would be prioritizing 10 horizontal and vertical sectors to leverage inherent advantages of Delhi-NCR. Some key sectors are consumer tech and consumer products, e-commerce, travel and hospitality, and education and edtech.
Anandan said Delhi-NCR would also need to have sector-specific “centres of excellence" (CoEs) for each priority sector, augmenting the CoE with sector-specific sandboxes and a panel of policymakers to improve ease of doing business. He said that corporate participation needs to be increased as low corporate participation in local ecosystems limits access, reduces opportunities and awareness to new technology.
Another suggestion was to build Delhi-NCR as a hotbed for electric vehicles (EVs). The recommendations included introduction of a digital window to expedite the recertification process for EVs (including e-bikes) and setting up a special EV cell in Delhi for planning and setting up of charging infrastructure, working with incubators and manufacturers to support startups and providing land at subsidized rates to startups for setting up a manufacturing hub of EV and battery units.
The government has placed emphasis on the expansion of the EV industry, which it believes would help cut rampant pollution afflicting major cities and also reduce costly imports of crude oil.
Anandan recommended the setting up of three world-class startup hubs, one each in Delhi, Noida and Gurugram, which would be designed to provide infrastructure for co-working spaces for start-ups and investors, and a place for community events, meetings and networking sessions. For instance, T-Hub has become a central location for startups, corporates, investors and mentors to meet, network and operate.
Amitabh Kant, chief executive officer of government think tank NITI Aayog, who released the report, assured the startup community of the government’s continued support in setting up incubation centres in the region. He pointed out that six Indian cities—Delhi, Mumbai, Bengaluru, Chennai, Hyderabad and Pune—are among the top 100 startup hubs globally and except the US, no other country has more than five cities on the list, making India a broad-based startup ecosystem.