Hyderabad: The startup ecosystem in Telangana is valued at Rs 11,550 crore ($1.56 billion). The IT sector in the State, despite the pandemic, recorded an 18 per cent growth rate year on year in 2020, compared with the national average rate of 8.09 per cent, the Global Startup Ecosystem Report (GSER) 2021 said.
The report is brought out by policy advisory and research organisation Startup Genome and facilitator of cross-border collaborations between entrepreneurs Global Entrepreneurship Network. State’s Industry and IT Minister KT Rama Rao had retweeted a news article on this.
“Telangana, India’s newest State, displays all the energy, growth and path-breaking thinking you would expect from a young, upstart ecosystem,” the report pointed out. Rama Rao had many times described Telangana as a startup State when it came to implementing new ideas.
The early stage funding that the startups got is about Rs 888 crore (about 120 million). The median seed round funding (initial capital raised to start a business) by startups in Telangana is pegged at about Rs 1.1 crore (about $1,50,000). The global average is Rs 3.65 crore ($4,94,000), the report said.
Series A funding, which follows seed round and is an important milestone for startup companies, is pegged at Rs 22.2 crore ($3 million), higher than the global average of Rs 19.9 crore ($2.7 million), it said.
The report has put Telangana among the top 15 Asian Ecosystem in affordable talent and top 30 in performance based on value created from exits and funding.
“Telangana may be a young State, but the roots of its success go deep. The State’s capital, Hyderabad, boasts eight universities and is home to one of the largest populations of students seeking technical education in India,” it said about the State attributes.
Listing out the reasons to consider Telangana for setting up startups, the report said Telangana government offered a recruitment assistance of Rs 10,000 per employee for the first year of operation to promote the growth of local idea-stage companies.
In the next phase, startups that record a year-on-year growth rate of 15 per cent as per their audited accounts during their first three years since incorporation are eligible for a grant of 5 per cent on their turnover (subject to a limit of $13600), the report pointed out.
Listing out some of the State’s initiatives, the report said the Telangana Social Startup Network (TSSN) aims to help establish 5,000 startups in the next five years, with special focus on social startups.
Telangana startups also have access to local investors, including like Hyderabad Angels, Anthill Ventures, Sri Capital, Endiya Partners, and Indian Angel Network, it said.
T-Hub leads India’s innovation ecosystem and since its incorporation in 2015 has provided 1,100 national and international startups access to technology, talent, mentors, customers, corporations, investors and government agencies. We-Hub is exclusively for supporting women entrepreneurs.
Telangana’s Life Sciences sector accounts for 35-40 per cent of India’s pharma production. The State Government’s Genome Valley 2.0 initiative aims at doubling the region’s life science ecosystem to Rs 7.4 lakh crore ($100 billion) in ten years. A medical devices park is under development. The State has also embarked on a journey to train about 30,000 youth in Telangana in the skills necessary to work in the growing AI sector, GSER said.
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