A handful of Indian cities feature among the top emerging start-up ecosystems in the world, with IT hub Bengaluru claiming the number one spot in Asia and the fifth rank globally for tech venture capital investment this year, according to a new report and research findings.
The Global Startup Ecosystem Report was launched by innovation policy advisory and research firm Startup Genome at the London Tech Week 2022 (June 13-17). Further research by data intelligence platform Dealroom. co for London & Partners showed that in the first five months of this year Bengaluru’s tech firms raised
$7.5 billion in VC funding, much higher than a then-record of $5.2 billion raised during the first six months of 2021. The “Silicon Valley of India” is now attracting more investments than other hubs like Singapore, Paris, and Berlin, and is trailing closely behind Greater Boston and New York.
According to business growth agency London & Partners data, the UK capital is also on course to attract record levels of VC investment in 2022. London is by far the most attractive tech hub in Europe for international VC investment, with firms there raising $11.3 billion so far — significantly more than the likes of Paris ($5 billion) and Berlin ($2.4 billion).
“This research demonstrates that London and Bengaluru are not just the leading start-up hubs in Europe and Asia but they are also competitive on the global stage,” said Hemin Bharucha, director of India for London and Partners.
According to the Global Startup Ecosystem Report, the Asian tech start-up community is undergoing a massive transformation. The ecosystem once dominated by Beijing, Singapore, Hong Kong, and Korea is now being considerably disrupted by Indian cities like Bengaluru, Mumbai, and Delhi. Bengaluru ranked 22nd in the start-up ecosystem globally due to major improvements in its market reach, while Delhi moved up an impressive 11 places to 26, and Mumbai was placed 36th.
The report highlighted Bengaluru’s formidable status as the tech capital of India, with an ecosystem value of $105 billion — higher than Singapore ($89 billion) and Tokyo ($62 billion). Bengaluru’s massive growth in 2022 is largely attributed to greater access to funding with major funding rounds for scale-up tech companies. This includes a $55.7 million Series D round for Ather Energy and Swiggy’s $700 million round in January.
The new findings also established London as the start-up favorite for Indian entrepreneurs. London’s start-up ecosystem has demonstrated its resilience despite Brexit and the Covid-19 pandemic, securing the second spot for the third year in a row, with a total value of $314 billion. According to London & Partners, London is the number one European city for Indian companies looking to expand outside of their home market and second only to Dubai for the number of foreign direct investment projects from India in the past five years (2017-2021).
The Startup Genome report also highlighted London’s strengths in high-growth sectors such as fintech, edtech, and climate tech. The city has produced more unicorn start-ups and billion-dollar exits than any other European hub. The UK capital is now home to 80 unicorns, more than the next three European unicorn hubs combined (Berlin, Paris, and Stockholm account for 78). So far this year, London has added six new unicorns — Paddle, Forterro, Payhawk, Tripledot Studios, Accelerant, and Learning Technologies Group.
The Global Startup Ecosystem Report also shows that the tech sector has weathered the pandemic better than other industries. It reveals that since the pandemic, tech companies grew 2.3 times more than their non-tech counterparts. According to the research, a record 540 companies achieved unicorn status in 2021, up from 150 in 2020, with 113 ecosystems producing at least one $1 billion+ firm (unicorn). Since 2012, global average Series A rounds have tripled to more than $18 million.
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