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From 2015 to 2018, Hyderabad has made all the right moves to become a startup hub

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19.12.2018

From setting up co-working spaces to offering mentorship, funding, and even facilitating tie-ups with corporates, the Telangana government is putting Hyderabad on the startup map.

When the Indian startup ecosystem – then mostly limited to Bengaluru and Delhi-NCR - was witnessing a funding frenzy in 2015, Hyderabad was still recovering from the turmoil in the wake of Telangana's birth. Known for its IT legacy, over the years, macro-economic factors had hampered growth and 2015 was almost the year for a fresh start.

Three years on, the city has acquired a serious reputation as a growing startup hub. It's not just about the funding that Hyderabad-based startups have raised. The number of entrepreneurs choosing to start up in the city is growing, as are the number of partnerships among startups, academic institutions, corporates, and the government.

One strong indicator of growth is funding raised. According to YourStory Research, Indian startups raised $8.3 billion in funding in 2015. Startups from Hyderabad raised $43 million that year - just 0.52 percent of the total. Cut to 2018: Indian startups have raised $11.23 billion so far. Of this, Hyderabad-based startups accounted for $400.95 million - that's 3.5 percent of the total.

The sheer number of startups too shows strong growth. In 2015, the Nizam's city was home to around 1,500 startups. Today, that number has grown to 4,000, according to the Telangana State Innovation Cell (TSIC).

A bigger push towards new-age technology

“Hyderabad has always had a strong entrepreneurial DNA. The IT legacy is testament to that. But in these three years, there has been growing awareness and push towards new-age technology startups. Each year, at the Centre of Innovation and Entrepreneurship (CIE), the kind of startups that come in are different. The entrepreneurs are maturing and growing,” says Ramesh Loganathan, a professor at IIIT and a mentor and guide at CIE.

There is also a growing number of students looking to start up, he adds. According to the CIE, there are 18 student-driven startups at IIIT today, up from just eight in 2015. In all, CIE is currently incubating 78 startups versus 54 in 2015.

Creating the right spaces

The push to increase startup activity in the city comes from government quarters as well – while different states have announced startup-friendly policies, for Telangana, the idea was more of a ‘need to have’ than ‘nice to have’.

Jayesh Ranjan, IT Secretary, Telangana Government, says,

“Being one of the youngest and newest states in the country, our first agenda was to build an ecosystem of technology and innovation. Post bifurcation, Hyderabad needed to catch up, and that needed to be done fast. We felt the quickest way to do that was by encouraging startups. So, we began with a basic framework and policy, and ensured it was translated on ground.”

The state government’s policy framework focused on physical infrastructure and programme management capabilities, which facilitated........

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