India’s Tech Center Underdog Fights Back

Considered to be one of India’s most developed cities, Pune is making a name for itself as a go-to tech hub in the country. In recent years, the city has seen an exponential growth of its startup community and may be on its way to taking the country’s startup capital top spot.

In this week’s edition of PYMNTS’ Weekly Tech Center Roundup, we land in the growing tech ecosystem of India to check on the small city of Pune and how it wants to make a big name for itself as a global tech hub.

Before we jump into the post, here are a few quick facts about Pune, India and its tech scene:

Pune has an estimated population of 5,926,606 people.

The city’s GDP is approximately $48 billion.

Pune has the highest number of software companies in India (212).

Pune has experienced highest record of growth within a span of 20 years.

The city is ranked as the 8th most populous city in India among metropolitan areas.

Last year, Pune was home to 322 startups.

India itself was ranked the third largest startup ecosystem earlier this year, with more than 100 accelerators, 200 active angel investors, 150 VCs and over 4,200 startups.

Pune is considered to be India’s fastest-growing tech hub.

India has shown itself to be a powerhouse when it comes to tech ecosystems.

With increased connectivity and strengthened consumer purchasing power, the country has seen steady growth and development in its economy in recent years. The region’s tech scene is described by many to be both young and vibrant, with the average age of startup founders being 28 years old.

As the ecosystem has matured, the country has seen a rising number of successful startups and greater access to funding. Some of the region’s most well-known high-valued startups include Flipkart, Paytm and Snapdeal.

Though cities like Delhi and Bangalore continue to battle it out for the title of being India’s top tech city, Pune is considered to be an underdog that’s gaining ground in the fight.

Just last month, the state government expressed interest in building up Pune as a go-to startup hub for the Maharashtra region and even the entire country itself. Chief Minister Devendra Fadnavis said he has high hopes that Pune could one day knock Bengaluru off its throne as the startup capital of India.

Fadnavis noted that the government is focused on providing whatever support it can to help accelerate entrepreneurial growth and develop the startup community.

“Our industry department has been working to facilitate ease of doing business and second generation reforms are on the way. Instead of red tape, we are giving out the red carpet to industries in the state,” he stated during the inauguration of the Force Motors facility in Chakan.

Sanchit Vir Gogia, Chief Analyst and CEO, Greyhound Research, also noted Pune’s potential to dominate as a startup capital, pointing out the city’s affordable cost of living, an increasing number of data centers, convenient transportation and travel options, and strong focus on research and education.

“Pune is an attractive prospect as it has a massive talent pool which is of good quality and it has fairly decent infrastructure. The Mumbai-Pune connectivity is also a strong factor that would attract startups,” Gogia explained to Tech2.com.

“Connectivity and internet access are things which startups thrive on and Pune can offer that,” Gogia continued.

The Health Care Hotspot

One sector where Pune carriers the startup torch is within the health care industry. The city has long been known for being India’s top hub for health care businesses and startups. According to SiliconIndia, one of the biggest factors contributing to Pune’s popularity among health care related establishments is the availability of skilled human resources.

The city is known for being home to a large number of acclaimed medical, technology and management institutions, which has provided Pune with both a talented workforce and highly-educated students looking to enter the job market.

Despite the resources and benefits the city boasts, there is a noted drawback or challenge some startups face by being a part of Pune’s startup community: funding. Due to the its small size, investors may overlook startups in Pune and instead focus on ventures in larger markets such as Mumbai, Bengaluru and Chennai.

However, not everyone sees this as a negative. Abhijit Gupta, CEO of Praxify Technologies, said that it could actually work in favor of the startups located there.

“There is a lot of noise in other cities; we wanted to do our groundwork and Pune provided the best environment to do that and stay under the radar. Pune lacks investor attention, but it’s better this way – it helps companies focus on the basics and bootstrap. Investors will get involved only when they really want to invest,” Gupta explained.

Eyes On The Funding Prize

Pune-based startup WorkApps, which supports enterprise workflow collaboration, announced that it raised a $1 million seed round from SRI Capital. The work management system is designed to help enterprises integrate collaboration and communication into their workflows. With its new capital, the company has plans to expand its product offering into the U.S., Europe and Asian Pacific region by the end of the year.

“Enterprise Workflow Collaboration on SaaS will be a dominant force in the enterprise space and our product will enable large enterprises to augment communication efforts, improve efficiency and change the way people collaborate and work together,” Rudrajeet Desai, founder and CEO of WorkApps, explained.

Another startup based in Pune, Yellowdig, also shared funding news recently.

The course collaboration software company, which caters to the management systems of universities and colleges, also received an investment from SRI Capital. The SaaS startup is just one of the many enterprise software companies to recently enter the market.

Sashi Reddi, managing partner at SRI Capital, said that there are plenty of growth opportunities for these types of ventures and noted that the recent investments mark 15 SaaS startups in the VC’s portfolio of 23 companies.

“We need to realize that the Amazon of India will be Amazon,” Reddi told The Economic Times.

“Indian consumer startups need to deliver offerings or adopt business models that are unique to this country. There are also opportunities in enterprise software where product fit can be tested out in India and then taken to overseas markets.”