India’s financial hub is now set to become the world’s next big startup hub.
Mumbai has topped a recent ranking of emerging startup ecosystems, getting a perfect score on a bunch of metrics such as funding, market research and talent. The ranking, issued by research and policy advisory Startup Genome, assessed over 270 ecosystems across 100 countries, ranking the 40 best hubs, and the next 100 most promising ones.
These findings are in sharp contrast from a decade ago when Mumbai was not considered a startup-friendly city. In fact, several startups—including Ola and InMobi, which went on to become unicorns—were initially based in Mumbai and then moved out of the city in their early years due to high rentals, lack of access to investors and scarcity of tech talent, among other things.
Now, the commerce capital of Indian is home to over 9,000 startups spread across various sectors from e-commerce to enterprise tech and fintech. The city also has several incubators, accelerators, and entrepreneurship cells for students. In 2019, Mumbai saw its first two unicorns, gaming giant Dream11 and healthtech startup CitiusTech.
The rise of co-working and co-living spaces have helped lessen the burden on young firms. Mumbai had the highest proportion (14%) of co-working space to total office leasing in India in 2018. The city also ranked as the best co-living city in India in 2019.
Outside of the emerging list, there were two Indian cities in Startup Genome’s top 40 startup hubs list: Bengaluru (ranked 26) and Delhi (36). While Bengaluru fared well for high access to funding, Delhi stood out for the volume and complexity of patent creation.
Going forward though, challenges spurred by Covid-19 may hurt startup growth across the world. Fundraising has been disrupted, young startups don’t have sufficient finances to even last a year, and revenues are dropping, too, the report notes. “This is the time for policymakers, community leaders, and foundations to double down on their support of local startups—the #1 engine of job creation and economic growth,” said JF Gauthier, founder and CEO of Startup Genome.