Bengaluru more than doubled its venture capital funding to $18.6 billion in 2021.
The stellar growth put India’s Silicon Valley ahead of China’s Beijing and Shanghai, which have historically clocked much higher figures, says a report from London & Partners and Dealroom.co.
Bengaluru also had the two Chinese cities beat by a mile in the number of funding rounds.
The capital of the southern Indian state of Karnataka ranked fourth in the top 10 hubs by new unicorns category, something no Chinese city made an appearance in.
Do investors prefer China over India?
The investment sentiment in China has been souring in recent times with Xi Jinping’s administration cracking down on tech and other private sector companies and high-profile entrepreneurs.
Investors are, thus, looking at India more favourably. The country is flush with VC money, a growing talent pool, and untapped domestic demand.
At the same time, a key turnoff point, that Indian startups don’t provide lucrative exits, is being laid to rest. Last year saw a string of IPOs. Barring Paytm’s devastating performance, other market debuts such as Zomato, Nykaa, and PolicyBazaar fared well.
Overall, though, China is still ahead of India because it’s been in the race longer and has created more hubs that still stoke interest in global investors. India, no doubt, is rapidly bridging the gap.
Yet, neither country can match the US, which nearly doubled its total VC funding to $328 billion in 2021.