Delhi has replaced Bangalore as the start-up capital of India, according to the Economic Survey 2021-22. The national capital added over 5,000 recognised start-ups compared to the 4,514 start-ups added in India’s software capital between April 2019 and December 2021, the Survey noted. Maharashtra emerged the State with the highest number of recognised start-ups with 11,308 ventures.

Better infra

Commenting on the Survey findings, Anup Jain, Managing Partner, Orios Venture Partners, said, “The emergence of Delhi NCR is an indication that it has grown in scale and preference amongst founders as a city to house their ambitions in. It is important to note that really speaking, it is Gurgaon and Noida which are drivers of this trend with their cosmopolitan neighbourhoods, co-working spaces, affordable rentals, and access to the largest urban MRT system in the country.”

Jain also pointed to the enviable infrastructure of highways allowing superior connectivity to economic centres in neighbouring States like Jaipur, Chandigarh, Dehradun, Lucknow, Agra, and Meerut.

According to Srikant Sastri, President, TiE Delhi-NCR, “Several things have combined to build this momentum in favour of Delhi-NCR. The early set of successful internet entrepreneurs (Sanjeev Bikhchandani, Deep Kalra, Dinesh Kalra) from Delhi-NCR sparked a lot of enthusiasm and aspiration among younger people. They were then followed by the next wave of success that included Zomato, Policybazaar, PayTM, etc., which have gone all the way to IPO.”

Quantity vs Quality

Sajith Pai, Director at Blume Ventures, however, flagged the issue of “registered” start-ups being counted . He said the Survey’s anointing Delhi as the start-up capital seemed to rest primarily on the number of recognised start-ups registered in Delhi over Bengaluru over a 33-month period.

“Given that Delhi is a larger metro and the dominant economic hub in North India while Bengaluru has Chennai and Hyderabad with lots of start-up activities in its vicinity, it is not surprising to see the larger number of registered start-ups in Delhi over Bengaluru. That said, we don’t know how many of the registered start-ups may actually be operating outside Delhi, and perhaps may even have shifted to Bengaluru. Also, beyond quantity, the quality and size of the start-up matter,” he argued.

According to him, Bengaluru was the overwhelming leader in this regard and the magnet for talent, capital, and activity. “This is borne out when we look at deal flow (or funding requests) that Blume and other funds see,” he said.

The Economic Survey noted that India had a record number of start-ups (44) reach Unicorn status in 2021, and overtook the UK to emerge the No 3 country by number of unicorns after the US and China. As of January 14, 2022, India had 83 unicorns with a total valuation of $277.77 billion.

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