India

Bengaluru-Karnataka

#21

Global Startup Ecosystem

MEMBERS:

Karnataka Digital Economy Mission (KDEM)

"The Government of Karnataka is committed towards making Bengaluru the best place for founders to start and scale their businesses through conducive policies by the state government."

Highlights

Bengaluru has an established tech scene that is home to over 80% of India’s global IT offices, with the city’s software exports valued at INR 6.3 lakh crores ($76 billion). The city’s strategy has attracted venture capitalists and fostered a thriving startup environment, contributing to 40% of India's IT exports and producing 43 unicorns, including Zerodha, Cred, PhonePe, Flipkart and Big Basket.

Bengaluru hosts more than 400 Global Capability Centers (GCCs) out of India's total of 1,500, employs 1.3 million workers, and contributes $33.8 billion to the economy, approximately 1% of India's GDP. ANSR, a leader in launching and scaling GCCs for businesses, partnered with ServiceNow to secure $150 million in October 2023. This strategic move aims to train over 3,500 individuals in India, enhancing GCCs with ServiceNow's digital workflow capabilities for global operations.

In December 2023, the unicorn Udaan, a B2B platform connecting manufacturers, traders, and retailers, raised $340 million in a Series E round. Zetwerk, a B2B marketplace, raised $20.4 million in Series F funding in March 2024, bolstering its expansion into IT hardware and EV manufacturing.

Deemed Asia’s biggest integrated technology conclave, the 2023 Bengaluru Tech Summit showcased over 600 exhibitors and launched 37 tech products. It introduced GameTech Accelerate, targeting a $8 billion investment into the animation, visual effects, gaming and comics (AVGC) sector growth in 2.5 years. The event featured cutting-edge tech, including amphibious drones, self-balancing e-scooters, AI-driven healthcare devices, as well as technologies integral to ISRO's Chandrayaan-3 lunar mission. The 2024 edition will take place in November.

Ecosystem by the Numbers

ECOSYSTEM VALUE

(H2 2021 - 2023)

$158 bn

GLOBAL AVG. $29.4 bn

TOTAL EARLY–STAGE FUNDING

(H2 2021 - 2023)

$3.8 bn

GLOBAL AVG. $655 m

ECOSYSTEM VALUE GROWTH

(H2 2021 - H2 2023 VS H2 2019 - H2 2021)

22%

GLOBAL AVG. 46%

NUMBER OF UNICORNS

(H2 2021 - 2023)

GLOBAL AVG. 3

MEDIAN SEED ROUND (H2 2021 - 2023)

$750 k

GLOBAL AVG. $985 k

MEDIAN SERIES A ROUND (H2 2021 – 2023)

$8.4 m

GLOBAL AVG. $7.5 m

SOFT. ENGINEER SALARY (2023)

$12 k

GLOBAL AVG. $47 k

EARLY-STAGE FUNDING GROWTH (2020 - 21 VS. 2022 - 23)

Scale of 1 (lowest) to 10 (highest)

TOTAL VC FUNDING (2019 - 2023)

$32 bn

GLOBAL AVG. $4.6 bn

TIME TO EXIT (2019 - 2023)

7.2 years

GLOBAL AVG. 10 years

EXIT AMOUNT (2019 - 2023)

$7.5 bn

GLOBAL AVG. $8.9 bn

EXIT COUNT (#)

(2019 - 2023)

237

GLOBAL AVG. 80

55

34

49

60

39

2019

2020

2021

2022

2023

Sub-Sector Strengths

Fintech

The Karnataka Digital Economy Mission is advocating for the creation of a dedicated Fintech policy for the state, while there are talks toward the establishment of a Centre of Excellence in Fintech. Perfios, which offers real-time B2B credit underwriting solutions, raised $229 million in a Series D round in September 2023 KreditBee, a minimal-documentation digital lending platform, raised Rs 980 crores ($118.2 million) in a Series D round in January 2023. Neo-banking platform Zolve secured $100 million in a debt financing round in October 2023.

Life Sciences

In its 2023 budget, the Karnataka state government proposed an Rs 8 crore ($966,000) Health Technology Innovation Lab to support digital health initiatives. Further, the Karnataka Digital Health Society is being established to digitize health services and lead the implementation of India’s Ayushman Bharat Digital Mission in Karnataka. HealthifyMe secured $30 million in a June 2023 Series D round. PlasmaGen Biosciences, which specializes in plasma protein therapy and the manufacture of life-saving drugs, secured equity amounting to Rs 225 crore ($27.1 million) in December 2023.

Cleantech

At the forefront of India's electric vehicle revolution, Ola Electric has raised Rs 3,200 crore ($386 million) through a mix of equity and debt financing. In 2024, the company is aiming to raise Rs 5,500 crore ($663.5 million) to expand its EV range, including two-wheelers and cars. Ather Energy, an electric scooter manufacturer that raised INR 900 crores ($108.6 million) in September 2023, is also gearing up for an IPO in 2024.

Reasons to Move Your Startup to Bengaluru-Karnataka

Established Tech Scene

Bengaluru is a beacon for startups, producing the most unicorns in India, with success stories including Flipkart and Swiggy. Global innovation thrives here, with many Fortune 500 companies operating R&D and Global Capability Centers. The infrastructure is bolstered by government support, with policies to encourage IT growth, making Bangalore a central node in the global tech landscape.

Skilled Talent

Bengaluru’s over 800 educational institutions include revered establishments like the Indian Institute of Science (IISC) and Indian Institute of Management (IIM-B). Over 90,000 engineering graduates flock to the tech hub annually, and this rich talent pool contributes around 33% of the nation's IT workforce.

Government Support

Building on the Karnataka Startup Policy 2022–27, the 2023 Karnataka state budget outlines the establishment of a 100-acre Technology Innovation Park dedicated to semiconductor innovation. Innoverse is a planned incubation center aimed at supporting startups, while Propel is an initiative designed to connect state-funded startups with partners. The budget also introduces the Karnataka State Research Foundation and the e-KRDIP e-portal.