In the last decade, Bengaluru has evolved from the IT capital of the country to the startup hub of India. In 2022, the city topped the startup funding chart with $10.8 billion raised by firms in the city, the second city that came close was Mumbai at $3.9 billion.
The sector, which is creating a lot of jobs and attracting talent from across the country, is looking at the next government to solve some of its most pressing issues — infrastructure and transport.
Startups believe their productivity is hit by terrible road infrastructure and lack of a reliable mass transit system. “The other end of the city doesn’t have much of a startup ecosystem. It is only here (HSR Layout-Koramangala-Bannerghatta Road). I spend two hours on the road travelling on one side. It actually puts a lot of stress on me. Commute time has to be reduced," says Aishwaraya, a startup employee who travels from North Bengaluru to her office in South Bengaluru’s Bannerghatta road every day.
Most of the employees and founders complain that it takes 1.5 hours to cover just 11-12km.
HOUSE RENT NEEDS REGULATION
A majority of the workforce in the startup world is from outside Bengaluru and largely outside Karnataka as well. But housing in Bengaluru is expensive. Landlords charge anywhere between 6-12 months’ rent as security deposit apart from quoting exorbitant rent.
“I am from Chhattisgarh, I am here to work for a startup company. Rent is a huge issue. There are 2-3 BHK houses for Rs 60,000- 70,000 per month. Rents are increased arbitrarily while renewing the contract. The security deposit is at times as high as Rs 3 lakh. I think the government should do something about it," said Kamya, a startup employee in the city.
Karnataka is yet to adopt the Model Tenancy Act. If adopted, landlords can collect advance rent of only two months as security deposit. The act was passed by the Union government in June 2021 and the states were asked to adopt it, but a progressive state like Karnataka is yet to do it.
COLLABORATE, CREATE MINI-BENGALURUS
Even as there is a competition between several states to emerge as the first one to hit one trillion economy landmark, startup founders feel Karnataka could achieve it if more collaboration is ensured between the state government and startup ecosystem.
“In terms of policy, the government can do a lot more beyond IT space, right now IT is the preferred darling. But there is a lot more, for example, we work in education, collaborating with government on a large scale would be great thing to do," said Ashwin, founder of Flurn.
Many founders argue that startups ecosystems have to be created in tier II cities, especially with many of these cities having great educational institution providing raw talent.
“If Karnataka has to become a trillion-dollar economy, startups being just in Bengaluru won’t help. We need to look at how to create an entire ecosystem and job opportunities outside. There are great universities in Mysuru, Mangalore and Dharwad. But as founders, it has never crossed our mind that we should start somewhere other than Bengaluru. In fact, people from other cities come here. The government should look at what can be done holistically. We need many mini-Bengalurus across Karnataka," said Lohit, co-founder of Flurn startup.
In a recent action plan, the state government revealed that it wants to increase the number of startups outside Bengaluru from 2,955 now to 10,000 by 2032.
WILL BENGALURU-MYSURU HIGHWAY CHANGE THINGS?
Mysuru has been pitched as the alternative to Bengaluru when it comes to IT and startup companies, with the travel time between two cities reduced to 90 minutes.
Many believe it will help moving some startup investment to the cultural capital.
“The Union government’s startup India programme itself has given a huge impetus to the sector. Plus, the newly inaugurated Bengaluru-Mysuru highway will create newer opportunities in Mysuru," said Tejasvi Surya, Bengaluru South MP.
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