With Bengaluru’s GDP projected to grow at 8.5% till 2035, it will be the fastest growing city in the world for the next 15 years.
Among the world’s 780 major cities, 17 of the 20 fastest-growing cities in the world between 2019 and 2035 will be Indian, with Bengaluru, Hyderabad, and Chennai among the strongest performers, as per the Bengaluru Innovation Report 2019.
The Bangalore Innovation Report has been jointly released by the institutional investors Accel Partners, 3one4 Capital, and IdeaSpring Capital.
Bengaluru is India’s most millennial-friendly city with the highest employability rate in the country. It is also the first choice for women in employability. Bengaluru has a major demographic dividend with 37% of the city’s population between 15-35 years of age, the report states.
Bengaluru’s consumer economy is the most digitally savvy in India with a digital spend of Rs 8600 per person per month in the city. 38.1% of all UPI transactions in Tier 1 cities originated in Bengaluru as on October 2019.
Commenting on the cosmopolitan nature of the city, Vikas Sunder, COO, Swiggy says, “As one of India’s best-known consumer tech startups, it was a natural decision for us to be based in Bengaluru because of the tech-savvy and cosmopolitan residents of the city, who are both discerning and ‘early adopter’ customers for any innovative products that are launched.”
Bengaluru’s engineering colleges / population ratio is 5x more than Delhi and 1.7x more than Mumbai. As far as migrants are concerned, 44% of them moving to the city have tech skills as opposed to 12% for Delhi and 11% for Mumbai. 70% of the engineers in the city are less than 35 years of age, the report says.
Calling the Bengaluru ecosystem unique, Kris Gopalakrishnan, Chairman, Axilor Ventures, says, “R&D departments of startups, domestic and multinational corporations, academic and industry, defence, product and user organisations — co-exist in one metropolitan city. This means that future innovations are planned and developed in Bengaluru and also first used in Bengaluru and hence the talent in the city is up to date with the latest developments.”
Bengaluru’s unicorns have led to the creation of more than 2100 entrepreneurs across India, of which 1100 started a venture in Bengaluru. This is the largest snowballing effect seen across all startup ecosystems in the country, the report states.
Since 2010, over 31,000 startups have been founded in India with Bengaluru helping birth the most startups in the country. Further, the city has recorded more tech startups founded since 2016 than Mumbai and Delhi combined.
Bengaluru has seen a steady rise in M&A activity with the city witnessing the acquisition of 333 startups during the last 5 years, the report adds.
“Bengaluru is the youngest city and everybody is a techie. The adoption rate is much faster. So, if one really wants to test their product at scale, there is no better place than Bengaluru. It’s a great test market for any technology,” says Bhavish Agarwal, CEO of OLA.
The Karnataka government’s ELEVATE program has provided early stage developmental capital to startups helping de-risk innovation, with 82% companies coming from the Bengaluru region, the report adds.
Besides these, Bengaluru’s startup ecosystem has also benefitted from other policy interventions like: A Rs 10 crore fund for women entrepreneurs was set up under which the state government provided funding upto Rs 50 lakh; as part of the Karnataka Startup Vision, 47 innovation hubs, 6 centres of excellence and 5 technology business incubators have been set up.
The report also lists out some steps which can transform Bengaluru into the world’s largest Deep Tech hub: De-risking investments for early stage investors, 97% of deep tech startups would like to develop a long-term relationship with corporates for access to technological and industrial capabilities, and university tie-ups would help deep tech companies get access to quality human capital.