Here’s what plagues India’s Silicon Valley


Image: Getty Images

India’s Silicon Valley, Bangalore, was a startup darling only two years ago, but now its stellar appears to be dulling.

Don’t get us erroneous, Bangalore has a lot going for it Amazon and Uber have departments there, it is home to over 2,000 active tech startups but according to a recent report grading startup hubs, the city has fallen five places to No. 20 out of 55.

Hot new Asian hubs, Beijing, Shanghai and Singapore, have outshone it, according to Startup Genome’s startup ecosystem report.

So what’s causing the descend and what can be done to stop Bangalore from losing its fringed?


Talent issues

Despite being a “magnet” for engineering talent, Bangalore seems to have a quality problem. The report observes: “Engineers havent been chartered very rapidly, suffer is median and visa success is low.”

Also, there’s a lot of churn among employees who move around to seek better openings. This could be because Bangalore is among the least-paying startup metropolitans in “the worlds” for software engineers, who outline an average annual salary of $8600 13 times less than that in the original Silicon Valley.

Better payments could possibly detain attrition and attract high quality talent.

Low returns for VCs

Bangalore ranks a respectable seventh globally when it is necessary to valuations, but has a “very low exit sub-factor.” That basically means that venture capitalists who invest in the city’s startups have seen little or no success. Often duration, firms have shut down within a year of the continuing operation, drowning investor dollars with them.

Low departs, research reports asks, could necessitate two things: Either the city has a radiant future as these startups ripen or there is hassle at the top of the market with acquisitions.

Exits are tough in the Indian ecosystem only when they are incorrectly assessed. A pile of eras I have seen Indian firms stirring projections similar to their Silicon Valley peers without actually having the penchant to appoint global symbols like the Silicon Valley firms do, replies Kanwaljit Singh, founder and CEO of Gaussian Networks.

Getting real is the answer. Me-too startups have to be pruned. And the genuinely scale-able meanings with a potential for impacting millions of lives have to be backed.

Profitability problem

Most startups in Bangalore are cash-strapped. Even Flipkart, the poster-child of India’s startup economy, has yet to turn a profit after 10 years.

While funding seems fine, profitability has been the Achilles’ heel for the city’s startups. Even Delhi, India’s capital, reportedly has most profitable startups.

There is a widespread belief in India that marquee startups are justified in “re going through” a long period of heavy losings because Google, Facebook and Amazon went through this.

Domestic competition

While Bangalore is still India’s Silicon Valley, metropolitans like Chennai and Pune are catching up.

Chennai down south have so far been advanced as the SaaS centre of the two countries with firms like Zoho and Freshdesk, backed by rich investors.

And Pune in the west, which houses one of the three Microsoft data centers in India, is rising as a strong challenger to Bangalore because of its immense IT pool, inexpensive real estate and favorable speculation atmosphere. Some reckon that it might soon outpace Bangalore completely.

But if Pune and Chennai want to depose Bangalore, the cities’ startups must learn from its mistakes.

WATCH: This tricycle for adults will have you looking like the coolest baby on campus

Read more: http :// 2017/04/ 12/ india-silicon-valley-global-startup-ecosystem-ranking /