The many shades of Mumbai’s startup ecosystem

Discover the dynamic startup ecosystem in Mumbai, where innovation meets opportunity. Explore how the city nurtures entrepreneurs across industries, fostering growth and success for startups of all sizes.

In July this year, when Maharashtra’s industry minister made an ambitious call to increase the number of startups in the state to nearly 50,000 we were left with no choice but to listen.

Little is known about Maharashtra’s startup ecosystem and depths of its growth over the years. According to Harsh Jain, the CEO of real money gaming firm Dream 11, Maharashtra is still losing out to Delhi and Bengaluru due to concerns like skyrocketing rents and general lack of housing. (Source: Economic Times).

This trend remains a reality for the city, despite Mumbai holding about 19% of the share of startups in the country recognised by the government as of March this year. (Source TOI). Yet, there are some bright spots that suggest it has all the ingredients necessary to make for a bright, eclectic tech capital.

“Mumbai is the business capital of India. All large business communities are here, banking and financial services are here… so is the film industry. And when you are in the business hub you end up making bigger businesses no matter what it is you’re doing,” said Deepak Jain, Founder of Flexiloans to WeWork Labs on the sidelines of Fintech Fusion.

He also explained how by being in Mumbai, he was able to scale Flexiloans solely because of the proximity to large banks. Founded in 2016, by Jain and his co-Founders Manish Lunia, Ritesh Jain, the company has gone on to raise nearly Rs 360 crore in equity.

Of course, Flexiloans is one of the several Mumbai-based companies that have seen massive growth. Let’s look at how the ecosystem is composed a little more closely.

Increasing diversity

Collectively, the 118 Indian unicorns have raised more than $100 Bn in funding to date and are valued at more than $354 Bn combined, according to Inc42. Of these, eight unicorns count Mumbai as their headquarters. This includes Dream11, National Stock Exchange of India, Upstox, Eruditus Executive Education, Games24x7, UpGrad, MyGlamm, and LEAD School.

Now let’s take a closer look at the sector mix. Food and Agriculture Tech, Enterprise Applications, Retail and Fintech were the top-performing sectors, according to a report by research firm Tracxn. Interestingly, of the funding the state as a collective raised this year, enterprise-based applications emerged as the largest funnel, raising $340 million in H1 2024 from $178 million in the first six months of 2023.

Is Mumbai tech-startup friendly?

Given the density of the number of startups that operate in agritech, fintech, enterprise, and retail, there is still a perception that if you’re building a tech-focused startup you might not want to be in Mumbai.

By now, everyone in the tech startup ecosystem knows about Gaurav Munjal, the founder of edtech startup Unacademy. He has been particularly vocal about how those building tech companies should be in Bengaluru and nowhere else.

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But, some others who are based in the city, beg to differ.

“I saw this discussion happening on Linkedin as well… There is also news that a company shifted their headquarters from Mumbai to Bengaluru and I really don’t understand that,” said Siddharth Udgankar, Founder of Qila.ai, on the sidelines of Fintech Fusion. “A business at its core is about money and finance and you have to be where the money is and that is what [to me] Mumbai is. People [here] understand what is needed to make a business successful.”

Initiatives like the Tech Entrepreneurs Association of Mumbai (TEAM), are actively working towards fostering and encouraging greater diversity within Mumbai’s startup ecosystem. TEAM claims its members have a combined valuation of over $50 billion and have created over 10,000 jobs.

For the next two years, with its new governing body at the helm, the aim of this association is to encourage greater grassroots development. Aakrit Vaish, co-founder & CEO, Jio Haptik and co-chair for TEAM told CNBC: “. We want every young founder and engineer to start thinking of Mumbai as one of their top choices to build a startup.”

With everything from access to venture capital to accelerators and more, the right catalysts are in place to give Mumbai’s startup ecosystem the headstart it needs to be a vibrant startup capital in its own right. Only time will tell if these efforts reap the rewards.

That’s all from me for now, see you in the next WeWork Labs Blog!