Nearly 50% of recognised startups in India originate from Tier 2 and Tier 3 cities. However, over 90% of the capital flows into Tier 1 cities, with Bangalore, Delhi-NCR, and Mumbai being the major beneficiaries. Nevertheless, this trend is gradually changing as more entrepreneurs establish their businesses in Tier 2 and Tier 3 cities, drawing increased attention to these locations.What is driving this wave of innovation in Tier 2 and Tier 3 cities? Enhanced Government Support – The Government of India has been actively promoting innovation and fostering ecosystem growth through multiple initiatives. Availability of Capital – Between 2015 and 2021, startups from smaller towns raised $1.12 billion.

Source: Economic Times May 27, 2023 04:48 UTC