Unfolding in India's smaller cities is the next wave of promising startups

Beyond the pages headlined by the Flipkarts, Olas and OYOs is a story of startups in India's smaller cities which are beginning to catch the attention of the world outside as also of investors

Last November, barely 10 months after they joined hands to launch a startup, Vibhu Tripathi and Ayush Jindal found themselves among the finalists at a championship organised by Airbus in Toulouse, France. Over 140 startups from 51 countries had turned up for the event.

Tripathi and Jindal’s venture, Vizzbee Robotic Solutions, eventually came in fourth. And the aerospace company invited them to move to its India office in Bengaluru to be a part of its mentoring programme. But for the moment the two seem content to operate out of their hometown — Bhopal, the city of lakes.

Beyond the pages headlined by the Flipkarts, Olas and OYOs is a story of startups in India’s smaller cities — Jaipur, Chandigarh, Solapur, Thiruvananthapuram, Ghaziabad, Kochi — which are beginning to catch the attention of the world outside as also of investors.

In 2019, early stage investment fund and startup incubator Venture Catalysts made 13 deals featuring startups in Tier 2 and Tier 3 cities. It invested Rs 42 crore in startups such as Ghaziabad-based eyewear brand ClearDekho and Indore-based content platform, WittyFeed. And, as of January 2020, the Indian Angel Network, which funds early-stage startups, has invested Rs 70 crore in 22 companies, among them startups operating out of smaller cities.

“Over the years we have seen quite a lot of good deals coming our way from smaller cities,” says Digvijay Singh, chief operating officer at Indian Angel Network. “Of the 10,000-plus deals that we receive annually, 20 per cent are from smaller markets.”

Tripathi and Jindal’s Vizzbee, for example, specialises in drones that deliver medicines and emergency material in case of natural disaster. Their drones are programmed to navigate obstacles and carry loads up to 2.5 kg, making them ideal for disaster and emergency responses. “These drones can also be used for traffic monitoring besides carrying medicines and food,” says Tripathi.

The 23-year-olds had met on an online platform popular with those following developments in the world of aerial robotics. While Jindal studied at the Indian Institute of Technology-Delhi, Tripathi graduated from the Rajiv Gandhi Proudyogiki Vishwavidyalaya, Bhopal. Both were still in their final year at college when they started making investment pitches in the hope of starting a drone company. Last year, Vizzbee raised $1.20 lakh from Hong Kong-based zeroth.ai, an accelerator for early-stage startups in Asia that primarily invests in AI technology. Food delivery platform Zomato had acquired a similar drone startup, Lucknow-based TechEagle, in 2018. But while India’s airspace guidelines currently do not allow use of drones for food or medicine delivery, there’s hope that things will change in the future.

Vibhu Tripathi (left) and Ayush Jindal of Vizzbee Robotic Solutions

Jindal and Tripathi work out of B-Nest, an incubation centre that is a part of the Bhopal Smart City initiative. They share the space with 25-odd startups.

Incubation centres, both private and state-led, such as B-Nest that have come up across India have catalysed the small-city startup boom. But finding mentors who can take the young entrepreneurs through the basics of starting a business has been a challenge. Access to resources and exposure to the right kind of audience for their innovations, too, has been limited.

This is, however, changing, with some giants stepping in to help. Last September, for instance, Microsoft announced the “Highway to a Hundred Unicorns” initiative. “India has 27 unicorns today, and none of them is from a Tier 2 city,” says Lathika Pai, country head, Microsoft for Startups-MENA (Middle-East and North Africa) and SAARC.

The Kabadiwala co-founders, Anurag Asati (left) and Kavindra Raghuwanshi

Pai talks of building an ambitious system to ensure that entrepreneurs are not forced to migrate to bigger cities for want of funding or a better ecosystem — the way Razorpay did, shifting from Jaipur to Bengaluru.

Taking along investors and entrepreneurs who can mentor young startups, Microsoft has been holding competitions called Emerge X, since last September, to choose on an average the best 10 in every state from a shortlist of at least 100 startups. The initiative has so far covered four states: Gujarat, Maharashtra, Rajasthan and Kerala. “Two Emerge X winners have already got funding and a bunch of others is in talks with investors,” says Pai. One of them is Jaipur-based WholesaleBox, an e-commerce portal that helps shopkeepers bypass dealers and wholesalers to buy directly from manufactures. The other is Kochi-based Rapidor, which assists in sales order management, inventory control and payment processes.

Besides introducing startups to Microsoft’s technological prowess, the Highway event is creating visibility for these startups through workshops, boot camps and webinars, says Pai.

Like Microsoft, there are others doing their bit. Last July, Venture Catalysts launched a centre in Faridabad to help connect emerging startups from the area with high net worth individuals and investors from Faridabad. Similarly, Deloitte became the knowledge partner for Bhopal Smart City in 2018. The city saw 14 new startups emerging last year, according to data tracker Traxn. “Smart cities across India are playing an important role by providing a platform to budding ventures,” says Anurag Patni, who is a part of Deloitte’s consultancy team.

Kabadiwala allows people to schedule a pickup for scrap, paper, e-waste and plastic (a minimum of 10 kg) and pays them for it

Like Vizzbee, another success story from Bhopal is that of The Kabadiwala. A familiar sight in some of Bhopal’s neighbourhoods is a green and white tempo that goes about trumpeting the benefits of discarding waste properly. The startup allows people to schedule a pickup for scrap, paper, e-waste and plastic (a minimum of 10 kg) and pays them for it. It then segregates the trash and sells it to recycling outfits — like your regular kabadiwala. It also lets the customers know of the resources they’ve helped save (trees, oil, water) by ensuring that the waste material is recycled.

A student-teacher partnership, The Kabadiwala was founded in 2013 by IT professionals Anurag Asati (the student) and Kavindra Raghuwanshi (the teacher). “Our regular customers see us every three months, and those with food or manufacturing businesses or shops call us twice every month,” says Raghuwanshi. Last April, the venture secured Rs 3 crore from early-stage investors, high net worth individuals and industry leaders. The Kabadiwala has now expanded to Indore, Raipur and Aurangabad after building a base of 75,000 customers in Bhopal. “We’ll be launching in Lucknow and Nagpur next,” says Raghuwanshi.

Besides state governments that are helping the startup ecosystem are platforms such as Ahmedabad-based eChai, an offline networking community that organises events and meetups to bolster entrepreneurial dreams. The network has over 30,000 participants and presence in cities such as New York and Toronto.

“Look at the number of co-working spaces that have come up in smaller cities. This in itself signals a growing ecosystem and aspirations of the startup community,” says Jatin Chaudhary, co-founder of eChai. Next57, a managed office space co-founded by Prashant Sharma and Mohak Goyal in Chandigarh in 2017, is an example of this. In less than three years, Next57 has expanded to Ahmedabad, Kochi and Mohali.

Pritika Mehta, whose Chandigarh-based firm SockSoho makes quirky socks for men

Chandigarh is also the home of the ride-hailing app Jugnoo. And, the headquarters of a company that makes quirky premium socks for men, SockSoho. Founded in 2018 by data scientist cum entrepreneur Pritika Mehta, SockSoho started with her roping in a few friends to set up a direct-to-consumer fashion brand that would allow for customisations (including handwritten notes for gifting). Today the company counts among its clients sheikhs from Dubai, business honchos such as Curefit’s Mukesh Bansal and Lenskart’s Amit Chaudhary, and actor Vicky Kaushal.

Another hub to watch out for is Jaipur, which saw 38 new startups and an investment of Rs 31.72 crore in such ventures last year (Traxn data). And, there’s also Solapur in Maharashtra. Mayura Davda-Shah says she has lost count of the number of times she’s been asked how she runs her sustainable premium lifestyle brand, M A Y U, out of Solapur.

Mayura Davda-Shah

Crafted out of European fish leather (a waste product from fish farms in Ireland) and vegetable dye, Davda-Shah’s premium range of leather goods was launched in late 2018. The brand has since added a vegan line featuring pineapple fibre. With several other plant-based fibre tested for prototypes, Davda-Shah jests her website would soon be akin to a “food menu”.

A model with a M A Y U bag

“Solapur is home. Yes, I have to constantly travel for meetings but it’s worth it,” says Davda-Shah who used to earlier build private jets as a manufacturing engineer with a degree in management and entrepreneurial leadership from Babson College, Massachusetts. The model can work, she says, pointing out that her brand now also has presence in select stores in New York and London.

Like her, for Thiruvananthapuram-based GenRobotics the motto has more or less been “build it and they’ll come”. GenRobotics has created a sewer-cleaning robotic scavenger, “Bandicoot”. After supplying to municipalities in Kerala, Tamil Nadu, Karnataka and Telangana, GenRobotics will be sending the Bandicoot to Punjab soon. Started in 2015, the startup has now partnered with Tata Brabo (a robot production company) for bulk manufacturing.

“We’ve had a lot of help from the Kerala government. And though we’ve faced issues getting skilled people since everyone moves away to bigger cities, there’s no way we’ll leave Thiruvananthapuram,” says Arun George, one of the four co-founders. The team has taken up a second space in the city to expand its research and development operations. On the cards are also robots to clean skyscrapers so that a human being doesn’t have to dangle in the air precariously tied to ropes to do that job.

Davda-Shah of M A Y U talks of how she now has “zero friends” in her hometown of Solapur. “People just don’t want to come back.” For those like her who’ve chosen to build their businesses in places they’ve grown up in, the hope is that the attention these cities are getting might encourage some of those who’ve left to return.