Bangalore set to lose its coveted position of Asia’s top startup hub
Bangalore is India’s most favoured startup destination is a well known fact. But it also emerged as one of the most attractive destination in Asia in the last couple of years & climbed up the global startup ecosystem’s ranking considerably. It was even ranked ahead of Singapore by a few studies in 2021 and 2020. However, it’s losing its sheen and glitters with the same pace as it acquired them. Many investors flocked to this city of India in the past few years. However, its all set to change or rather has changed especially since mid 2022.
There are several reasons behind why Bangalore is all set to lose its coveted position to other Asian hubs. Some major reasons are:_
- Funding dried up:-With the funding winter setting it has become difficult for Indian startups to attract growth capital unlike the last couple of years.
- Poor performance of stalwarts:-The poor performance on the stock exchanges by the listed tech startups like Zomato, Nykaa and Paytm.
- Internal disputes:- Most of the Indian unicorns are engulfed by some or the other disputes involving the founders and investors. Some notable ones are Zilingo, BharatPe and Gomechanic.
- Corporate governance issues:- The Indian regulatory system is a funny one. They manage to come up with new laws every now and then to confuse people and entrepreneurs in general adding up to their already complex legal system. Almost all the heavyweight startups are entangled in some web of legal soup reducing the global investprs’ confidence in the burgeoning Indian startup space.
- Fraudulent practices:- Many Indian startups in their bid to raise more funds at a higher valuation, grow rapidly indulged in fraudulent malpractices of inflating the numbers in terms of users, customers and market size. The blanket is slowly getting uncovered.
All these factors are pulling down the weight and attractiveness of Bangalore, which was once not too long ago touted as a desirable startup hub in Asia which even surprisingly overtook Singapore in the top global startup hubs ranking compiled by Startup Genome. Its expected that the tables will turn again this year and Singapore will reclaim that coveted spot dethroning this new city Bangalore.
