Here's a piece of surprising news. Delhi-NCR is a bigger start-up hub than Bangalore. NCR not only beats Bangalore in the number of active start-ups, the region also has more number of unicorns, the highest cumulative private market valuation, and has three of the four most valuable listed Internet companies in India.
Not-for-profit organisation TiE Delhi-NCR and Bangalore-based research firm Zinnov on Tuesday released a report, 'Turbocharging the Delhi-NCR start-up ecosystem' that tested everyone's notions - how did Bangalore lose the start-up crown?
Numbers first. NCR, today has 7,039 active start-ups (defined as companies incepted in the last 10 years) versus 5,234 in Bangalore. Mumbai is a distant third with about 3,829 start-ups. Hyderabad, Pune, and Chennai have less than 2000 active ones each. Within NCR, Delhi forms the biggest chunk with about 4,491 start-ups; Gurgaon has 1,544 while Noida 1004.
NCR is going great guns in consumer product and services start-ups, in enterprise products and e-commerce. The region also has more unicorns than any other city - 10 unicorns versus the nine of Bangalore. The 10 unicorns are Oyo Rooms, Paytm, Delhivery, Hike, Rivigo, Zomato, Policybazaar, Snapdeal, ReNew Power and Paytm Mall. NCR now contributes more than 50 per cent of the cumulative private market valuation in the Indian start-up ecosystem. While NCR has a cumulative valuation of $46-56 billion, Bangalore totals $32-37 billion and Mumbai $10-12 billion.
However, all is not bright and beautiful. The report pointed out that the pace of new start-ups being founded have slowed considerably since 2015 in NCR (in India as well). While 1,657 start-ups were founded in 2015 in NCR, the number dwindled to 420 in 2018, highlighting the need for a more active and bigger seed funding ecosystem.
Nevertheless, there are many reasons why Delhi NCR snatched a lead from Bangalore. Business Today recently spoke to many investors and founders from both the cities. NCR, they all said, is the biggest consumption market in the country. The sheer volume of NCR makes it exciting as a test bed.
Anup Jain, the Managing Partner at Orios Venture Partners, an early stage investor, had said that Bangalore's traffic and congestion issues were effecting growth.
"This is a city (Bangalore) that has grown beyond proportion. They don't have the infrastructure. Various pockets have emerged and they are all far away from the biggest hub of transportation, which is the airport. You waste so much time travelling from the airport to any other hub in the city - whether it is MG Road, or Electronic City, or the Outer Ring Road, or Koramangala. Productivity for the entire ecosystem suffers as a result. You are late for meetings; you have to budget more time. Movement within the city is extremely difficult. You can't do more than two meetings in a day," he said.
NCR has severe pollution problems during the winter months but beats Bangalore hands down in infrastructure. According to the Ola Mobility Institute, Delhi's average speed on roads is around 23 km per hour and while this seems low, it is still far higher than Bangalore's 15.5 km per hour. Reaching Gurgaon, or the centre of Delhi from the airport isn't a big deal; it is a mere 13 km to CyberHub and 15 km to Connaught Place. Delhi also has nine times the operational network of metro (373 km) versus Bangalore (42 km).