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Bengaluru vs Hyderabad: Can Hyderabad Overtake Bengaluru As The Startup Capital Of India?

Image Source: The Times of India

Hyderabad has been working to lay one of the strongest foundations for a potent startup ecosystem and hub in India, despite Bengaluru recently stealing the startup’s attention. There was once a period when Bengaluru was expected to face stiff competition from Hyderabad.

Hyderabad was home to major corporations like Microsoft, Facebook, and Google at the height of its IT boom. A well-known narrative from the era describes how Bill Gates was persuaded by the then-chief minister, Chandrababu Naidu, to establish Microsoft’s Research Centre in Hyderabad. However, political difficulties like the Telangana agitation halted Hyderabad’s ascent to the top startup hub.


Image Source: The Hans India

Government representatives, financiers, incubators, and startups in Hyderabad are now making up for lost time. The outcomes are already apparent. The city will house Amazon’s most giant warehouse, which can store around two million items and is located in the world’s largest e-commerce company. Uber constructed a cutting-edge facility with its most significant international office in Hyderabad.

When comparing the cost of office space, Hyderabad is also less expensive than Bangalore, making it appear to be a more cost-effective option for huge MNCs planning to construct enormous offices with dozens or even hundreds of people. Bangalore, however, has long been considered India’s IT centre, making it the top destination for most conglomerates and corporations. The information technology-focused metropolis, commonly called the Silicon Valley of India, is home to numerous special economic zones (SEZs) and IT parks.


Data as 2016
Image Source: Your Story

Regarding infrastructure, Bangalore is also very sophisticated in the regions reserved for businesses that offer software services. Companies can move quickly as a result, and they can easily blend in. Companies can choose to start operating right away.

Which City for IT: Bengaluru or Hyderabad?

Out of the 40,00,000 IT experts in India in 2017, more than 15,00,000 were based in Bangalore. By 2020, this number in this city was projected to double to 80,00,000 experts working directly or indirectly in IT.

Bangalore is one of the greatest suppliers of human talent pools, notably in the IT and software development industries. The pandemic may have delayed this, or Bangalore may have already reached this point this year. This city will always have a supply of highly qualified individuals because it is also home to numerous academic institutions and technical schools.

Many workers are eager to stay in Bangalore and work for their employers because it is a desirable place for workers. This fact is further supported by the fact that more than 50% of Bangalore’s population is made up of immigrants.


Image Source: India Briefing

As a result, picking Bangalore is a terrific option for businesses worldwide because they can choose from among the greatest minds in the sector. Bangalore has additionally been named the world’s most dynamic city by the City Momentum Index. The World Economic Forum and JLL, a UK company operating in over 80 nations, support these opinions, particularly regarding infrastructure and economic growth. Hyderabad, which ranks second in the City Momentum Index, is not far behind but worth mentioning.


Image Source: World Economic Forum

Hyderabad outperforms the other five major cities, including Bangalore and Mumbai, regarding the rate at which office space is absorbed. In the second quarter of 2021, Hyderabad witnessed an office space absorption of 1.26 million square feet. This was a whopping 129% increase from the previous fiscal year, which contrasts sharply with the top five metro cities’ 6% average growth.

Simply put, this demonstrates how quickly Hyderabad is developing and how many businesses establish offices here or grow their base. 34 SEZs in Hyderabad are entirely functioning, and 64 SEZ projects with official approval are in progress. This motivates a lot of IT specialists and software engineers to move here or hunt for employment here. This enables businesses to save money on expenses like rent or salary and makes hiring qualified human resources simpler.

Also Read: LinkedIn Debate: Is Gurgaon A Better Place For Startups Than Bengaluru?

Despite having various components, Hyderabad’s startup ecosystem still needs to receive the same financing level as Bengaluru. Hyderabad entrepreneurs would have to compete with Bengaluru-based startups with greater finances, even if the city has decent technological skills.

So Which City Is The Best?

No matter which city emerges as the new “Silicon Valley of India”, the ultimate winner is India, as both cities contribute massively to the country’s economy and provide several job opportunities.

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