The Indian Startup Story is flourishing in Tier II Cities. Here Is Why.

Article by : Ajit Balkawade


India is home to thousands of startups and the number is witnessing a turn of the tide in the near future. The news is – Tier II cities in India like Pune, Ahmedabad, Udaipur, Kota are providing a cocoon for the beautiful butterflies of tomorrow. These cocoons are coworking spaces which are an ideal home for all start-ups.

“Mushrooming of coworking spaces in smaller cities is due to the rise of startup aspiration and a sign of healthy and growing ecosystem,” says Jatin Chaudhry, founder, eChai, an Ahmedabad based start-up community.

Co-working spaces are ideal for start-ups due to various reasons. However, the primary reason for startups to choose is co-working spaces is costs and low investment in capital. For example, shared spaces offer weekly, monthly packages based on individual seats. In cities like Pune, these charges can be as low as 4000-5500 per month. Additionally, shared spaces provide printing, reception, maintenance, security facilities usually as part of the whole package. Hence, startups are not required to invest separately in these facilities.

There is a hidden side to the success of coworking spaces as well. Many entrepreneurs prefer working in this environment for collaboration as well as encouragement. According to Vishnu Raj, founder of QuadProSo, “The general atmosphere is of collaboration and not competition,” he says. “People are helpful and eager to share an idea, which makes the entire experience more fruitful,”

The trend is also seen in countries like the US where real estate in relative terms is not as expensive as in India. Many startup founders in the US prefer to stick to a coworking space until their idea is backed by investors. However, the story of Asian countries is definitely ahead of the curve. According to a recent study, 73% of Asian co-working spaces are eyeing an expansion this year, compared to the global average of 66%.

The rise of startups in tier II cities is also a testimony to a silent rise of the hidden ambition of India. Traditionally Tier 1 cities like Bombay have been the home of company headquarters and important for big companies to settle in. However, their prestige and status hide their safe and complacent worldview. On the other hand, rising number of startups in tier II cities shows a rise of the true entrepreneur spirit unlike ever before.

Similarly, earlier the age of an average businessman was 37 years. Now, the age of an average businesses man has lowered to 27.3 on average.  Our urban landscape is full of wonderful and insightful stories under the carpet of never-ending daily chaos.  So, are you looking for a place to start your new business? Consider living in a small city, it may do your financial health a ton of good!

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