The presence of this particular talent significantly enhances the prospects of startups in non-metropolitan areas.

Mumbai Little box, a direct-to-consumer fashion startup originating from Guwahati, recently secured a rare collective investment deal on Sony Liv's reality TV program Shark Tank. The founders' clear understanding of business principles and the company's steady growth caught the attention of an investor, prompting inquiries into the state of the startup environment in Assam. Similarly, startups hailing from states like Rajasthan, Uttarakhand, Bihar, and Odisha also presented their investment pitches, indicating a growing trend where the startup culture is becoming more widespread, extending beyond the traditional hubs of Bengaluru, Mumbai, and Delhi-NCR.

While the rise of startups from smaller towns and cities is not a new occurrence, it is steadily increasing, aided by the availability of talent, partly due to the establishment of regional offices by IT and technology firms, government support, and a strong digital infrastructure. According to analysts at Bain & Company, the proportion of seed-stage investments in startups from beyond the top three metropolitan areas increased in 2023 compared to the previous year, with emerging hubs like Nashik and Jaipur being recognized. Approximately 24% of 628 deals in 2023 involved startups from other cities (including non-metros and tier-2 towns), compared to 20% of 970 deals in 2022. With the expansion of the venture capital pool, investors are exploring opportunities beyond the conventional choices, seeking promising deals at the seed and early stages that require lower capital deployment, as noted by Ramdas Seetharaman, a senior partner at McKinsey & Company.

Presently, startups have extended their operations to over 600 districts in India. A Nasscom study from the previous year revealed that smaller towns contribute to 60% of overall graduates, with an estimated 11-15% of tech talent situated in tier-2 and 3 cities. Consequently, it's not surprising to see startups emerging across various sectors such as fashion, mobility, food & beverages, and technology from these regions. Notable examples include Cardio, a unicorn valued at $1.2 billion, headquartered in Jaipur, and Monbiot Diagnostics, which achieved unicorn status in 2022, originating from Goa.

Improved infrastructure has facilitated remote work without compromising on talent quality. This enhancement in infrastructure enables startups to establish themselves in cost-effective locations. Additionally, incubators and accelerators have played a crucial role in expanding the startup ecosystem, with government-backed programs like Rajasthan's Start incubator facilitating funding and support for over 200 startups, as revealed by the Bain study. Seetharaman predicts that India will witness the emergence of more deep-tech, innovation-driven startups in the coming decade, many of which may be based in cities equipped with reputable institutions capable of providing relevant resources and expertise.