Bengaluru wears many a halo that only a few cities in the country can dream of. Once regarded as Pensioner’s Paradise, Beer Capital and Garden City, Bengaluru has morphed into being home to some of the youngest entrepreneurs in the world with `start-up’ business as their passion.
Leveraging its information technology it burst into the global arena to be recognised as one of the top tech-cities of the world. But Bengaluru is now jostling to shake the “start-up” world, having already entered the hall of reckoning of being one of the dynamic cities by the Jones Lang LaSalle (JLL) “City Momentum Index, 2015”.
The index, only second in the series, saw Bengaluru helping India making a debut with its strong all-round robustness to jostle with the world cities such as London, San Jose, Beijing, Shenzhen and Shanghai which lead the table in that pecking order. It left behind its peers Mumbai and Delhi while it is ranked ahead of Singapore by five notches.
With its almost invincible reputation as the premier technology hub in the country and ranked 12, among the top 20 technology-rich cities globally, Bengaluru is now pitching its stake to earn the coveted niche of being a role model and as the “Start-up Hub” of India. JLL, a global property consultant had included the city in its Index for its overall economic development potential. The parameters take into account, the city’s status of being home to tech- industry majors and real estate momentum.
The city boasts of 1,700 start-ups that include the likes of Flipkart, Quikr and Ola. According to Angel List, a US website for startups and, angel investors, Bengaluru has seen growth of numerous start-ups in the past few years. Building on its tech-services legacy, Bengaluru has emerged as tech-entrepreneurial hub to host the largest number of home grown “Unicorns” –a term used to describe start-ups valued at $1 billion or more. And it is poised to add more, say analysts.
At the head of this revolution are young band of entrepreneurial aspirants. Risk appetites are driven by the urge to be their own boss. The sense of challenge was articulated by a young executive, who recently quit his job to start his own venture along with his friends when he said “we want to be bosses than being bossed around”.
This 28-year-old entrepreneur is only an endorsement of a recent survey conducted by the San Francisco-based research firm ‘Compass’ that provides global benchmarking tools. In its finding ‘Compass’ said that at an average 28.5 years, Bengaluru had the youngest entrepreneurs in the world. By comparison, in Silicon Valley, California, the world’s largest start-up hub, the average age is 36.2 years.
Unlike their traditional peers in business -- the big business corporations -- start-up enthusiasts did not wait for any government sops—tax incentives, concessional land allotment, power subsidy and financial supports. They chartered their own course by taking cue from the American maxim, “up by the boot strap”. With a vast unmet demand in the retail sector, which is just evolving in the country, it was not surprising that start-up concept is focussed in this sector. They are reshaping home delivery services to ‘on-call taxi service’ (Ola), laundry services, travel and entertainment and `fit-to- one’s taste’ apparels for the fashion conscious.
Unlike the Silicon Valley, which witnessed a disastrous initiation into the start-ups, Bengaluru braced itself with better aplomb. So far there have been few busts of the sort that almost killed the start-up spirit of Silicon Valley’s dot-com bubble of the 1999-2000.
Start-ups here seem to have a slightly better survival rate. Flipkart got $ 550 million of private equity (PE) funds through US-based Tiger Global Management. This was on top of the $700 million the company had raised in December 2014. Travel aggregator Redbus.in, on the other hand, was acquired by South African multinational, Naspers for $100 million. In February this year another bus ticket start-up Abhibus.com from Hyderabad was able to raise $10 million of PE funds. Obviously, a trend that testifies PEs’ and risk capital investors’ increasing interest in patronising any new ventures started by young entrepreneurs.
The flow of funds from venture capital, private equity and angel investors have enhanced the confidence of young entrepreneurs. The support for start-ups from high profile individual investors like Ratan Tata, Azim Premji, Narayana Murthy and Nandan Nilekini has further added weighty dimension for survival prospects.
"What I look at while investing in startups is the quality and intelligence of the entrepreneurs,” Tata said explaining his investment rationale recently.
But governments are also beginning to support start-ups. Along with a budgetary support of Rs.10,000 crore, the Central Government plans to exempt the start- ups from procedural hassles such as registration and tax processes. State Governments of Rajasthan and Karnataka are also coming out with policy support proposals. Rajasthan has a five- year perspective plan envisaging setting up of 50 incubators to provide an accelerator effect for 500 start-ups with facilitation for an Rs.500 core funding. Karnataka plans to unveil a “unique” start-up policy, focusing not only on tech-ventures but also on manufacturing in pharma, defence and banking.
Perhaps Indian start-ups may well reverse the popular joke that had captured the gloom of global recession and economic downturn of the 2000s.
The no “Jobs ( Steve Jobs), Not Hope (Bob Hope) and No Cash (Johnny Cash) could well be read as “more jobs, more hope and more cash.”