From Oxford of the East to a Growing Startup Hub
The Look at the Startup Map
Turn the clock a few years ago and you will see that the city hardly had any startups. But from being home to few startups in 2014, the city has charted a long journey; by the end of 2018 the city was home to over 3200 active startups and the number is only set to grow in the years to come. Fuelled by the state government’s push, availability of a talented pool of professionals and general ease of doing business, Pune is fast emerging as a force to be reckoned with in the Indian startup eco-system. Infact, Pune was the only Indian city to be named as an emerging startup hub in the ‘Global Next’ category by the Center for American Entrepreneurship named in 2018.
While the city was a manufacturing and automobile hub, Pune has witnessed various startups crop up from across industry sectors such as financial services, deep tech, agriculture, education, healthcare and life sciences, automobiles and manufacturing to name a few. Between the period of 2014-2018, Pune startups received funding worth $1 billion through 132 equity deals. Some of the most significant startups to come out of Pune are Altizon, Pubmatic, Druva Systems, MindTickle in the new technology space, Agrostar, Kisanhub in the agritech space and Sride, Masware, Spareshub, Tork Motors in the automobile space.
Some of the local startups also received attention from big ticket companies and were acquired consequently. Such as in 2018, Dineout services acquired cloud-based Point of Sale (PoS) firm Torqus Systems. In the same year Big Basket acquired Pune based micro-delivery startup Raincan, and Capital Float acquired Pune based personal finance management startup Walnut.
However some of the most significant startup success stories to come out of Pune are of Druva, FirstCryand Icertis that received the coveted Unicorn status. In 2019 Druva raised $130 million in series G funding from US-based Viking Global Investors, Neuberger Berman, and Atreides Management. The following year in February FirstCry a D2C brand baby and mother care product startup raised $300 million from SoftBank Vision Fund and sashayed into the unicorn club.
Having attained a strong position in the burgeoning Indian startup ecosystem in such a short span of time is no ordinary feat. The growth can be attributed to a combination of various factors, the primary being a slew of initiatives rolled out by the state government. In 2017, the state govt set up the Pune Idea Factory Foundation (PIFF), with the objective to create the right kind of ecosystem to encourage startups, and help drive innovation and growth.
Under the aegis of the PIFF program an entire spectrum of measures such as setting up incubation centres, providing access to funding, creating networking opportunities are being rolled out. The state government has also been facilitating access to a larger network of partners and investors to strengthen the ecosystem within Pune. Additionally, policies such as ‘Maharashtra State Innovative Startup Policy 2018’ and ‘Fintech Policy’, have also acted as catalysts in terms of driving startups towards growth.
Pune is also known for its ease of doing business and ease of living. Given the offer of a healthy quality of life and favorable weather conditions Pune attracts a large chunk of talented working pool. With a robust ITeS and automotive manufacturing units along with various research & development centers, the city is a hub of financial activity. The city is also home to over 442 colleges of which more than 100 are engineering institutions.
With a young and enterprising demographic, Pune’s startup eco-system is on an upward growth trajectory.
Factors Holding Back
Although Pune has achieved a considerable amount of success as a startup hub, yet there remain several crucial factors that are holding the city back from becoming a true super power. The Pune startup ecosystem is marred by the lack of access to funding houses and has to depend of external funding houses. The city also suffers due to lack of international connectivity and rapid transit metro connectivity issues as it poses considerable infrastructural bottlenecks. Another challenging roadblock is the lack of incubators and accelerators across the city owing to its nascent position in the startup ecosystem.
However, the city is seeing the growth in terms of funding houses. In 2017, Pune got its first in-house VC firm, Alacrity India Fund. A part of Canada-based investment management firm Wesley Clover International Alacrity India Fund was launched with a corpus value of INR 692.6 million. Gradually, the city became home to other fund houses as well including Better Capital and Venture Catalysts. The city has also witnessed a rise in the number of co-working platforms that has helped facilitate a robust startup infrastructure.
The connectivity conundrum is also being addressed by the state government’s announcement of the construction of a new international airport in Pune. The city will also have its own metro line soon.
Given these steps, the city is well on its way to carve a brighter spot for itself in the Indian startup landscape.