Rancho’s India Startup Story

Pune & Chennai Startup Ecosystem Analysis?

?

Pune Startup Ecosystem Analysis??

Pune, often referred to as the "Oxford of the East" due to its array of prestigious educational institutions, is a vibrant city located in the western Indian state of Maharashtra. Known for its rich historical heritage, Pune seamlessly blends modernity with tradition, offering a unique cultural experience. Perhaps that is precisely why Pune is known as a burgeoning IT and manufacturing hub, as it attracts professionals and students from across the country, making it a dynamic and innovative hub for IT startups since decades ago.??

Ranked as the 5th best startup ecosystem in India by the Global Startup Ecosystem Index, Pune has established itself as a startup powerhouse in the IT sector. Despite its drastically smaller funding in comparison to Bengaluru and NCR, Pune startup ecosystem has made a name for itself and has been attracting more investors. Some investors even going as far as exclusively looking into Pune startups for promising ideas.??

Pune has been able to gradually build its IT strength through the strategic use of its educational institutions with multitalented individuals and active support from the government to redirect funding into Maharashtra. Renown institutions such as the College of Engineering Pune (COEP) and Pune Institute of Computer Technology (PICT) feed talent and creativity into Pune’s startup ecosystem. The schools’ focus on technology further pushes the Pune’s specialty in technology to greater levels. Pune isn’t limited to IT, however, as the city is also located in the manufacturing belt of Maharashtra, equipping startups with the ability to swiftly manufacture their ideas into physical reality.?

To add to Pune’s already impressive environment for startups, the government has also been pushing for investments to reach Maharashtra. The state’s flagship initiative, ‘Magnetic Maharashtra’, expedites the process of approvals and other administrative matters, removing temporal obstacles. Meanwhile the ‘Startup Maharashtra’ initiative prioritizes nurturing existing startups through tax incentives and state-funded grants.??

These resources and government support have worked to build a strong startup ecosystem that continues to grow. One of these startups, XpressBees is making incredible strides and making a mark on the Pune startup ecosystem. An Indian logistics firm providing B2C and B2B delivery services, cross-border logistics, and 3rd Party Logistics (3PL), XpressBees was founded in 2015 and has attracted the attention of investors worldwide.??

XpressBees has raised over $277 million in funding since its launch. Initially the company provided their services for limited cities but now their services extend to the entire nation and their number of employees exceeds 10,000. XpressBees continues to grow and provide additional services with their goal to “establish their position as the foremost logistics partner within the industry.”?

Perhaps Pune is a prime example for countries seeking to decentralize their national startup ecosystems. Government initiatives to strengthen Maharashtra were able to see light due to the city’s proximity to esteemed institutions and manufacturing chains. Their specialty in technology also allowed for a more spearheaded growth that attracted investors globally, some of which were seeking to invest in Pune startups exclusively.?

Chennai Startup Ecosystem Analysis??

Chennai, situated on the Bay of Bengal in eastern India, is the vibrant capital of Tamil Nadu. Known for its rich cultural heritage, bustling economy, and historic landmarks, it stands as one of India's major metropolitan cities. In recent years, Chennai has also emerged as a thriving hub for startups.??

Ranking 6th best startup ecosystem in India by the Global Startup Ecosystem Index, Chennai is fast growing into a global startup hub. Despite its relatively weak funding in comparison to other Indian cities such as Bengaluru, NCR, and Mumbai, Chennai has produced 4 unicorns in the past decade and has made its mark as the startup hotspot of southern India.??

Chennai’s successful growth can be attributed to a variety of factors coming together to make an ideal environment for innovation to thrive and startups to grow. The city's strong educational institutions, skilled workforce, and supportive government policies have fostered innovation and entrepreneurship, making it an attractive destination for aspiring entrepreneurs.??

As we mentioned in a previous post about Pune, India has been doing a brilliant job decentralizing its startup ecosystem by making efforts to redirect venture capital funding to areas with strong education infrastructure and intellectual density. Chennai is another case where a startup ecosystem has rapidly formed with educational institutions as its foundation. Chennai is home to impressive educational institutions, such as Anna University and Indian Institute of Technology Madras, that injects fresh ideas and talent into the startup ecosystem.?

In addition to its proximity to educational institutions, Chennai’s thriving and growing startup ecosystem can also be attributed to government support. Just like Pune, many state-led initiatives support simplify regulations on processes, provide financial support, and offer other means of additional aid to startups in order for them to grow and so that they may focus on innovation.??

One of Chennai’s successful startups is Garuda Aerospace Pct. Ltd. The company has a colossal fleet of over 400 drones and 500 pilots across 84 cities. 30 different drones with 50+ services cater to diverse industry needs such as agri-tech and even the armed forces. Just last year the company secured Rs 25 crore (approximately $3 million) in funding due to its promising growth exhibited in their doubling of revenue reported in 2022. Garuda has secured its position as the leader of India’s drone industry especially in the agri-tech sector where it has shown most of its growth.?

?

Key Takeaways?

By taking a closer look into Pune and Chennai’s lively startup ecosystems it becomes clear how India has grown into the 3rd largest startup ecosystem in the world in the past few decades. By utilizing its already spread out and decentralized educational resources as well as actively incentivizing and supporting the growth of startups in various regions, India was able to geographically divide its startup growth and is now on track to becoming an even greater national startup ecosystem. Other countries, take notes!?

This article has been written by Rancho & Tae Kyeong Hong

#Indiastartup #Indiavc #whyinvestinIndia #investinIndia #IndiaSouthKoreacorridor #Indiainnovation #Indiastartupecosystem