Bengaluru continues to be India’s top startup hub and data backs it. In H1 2025, it raised $3.9 billion in startup funding across 143 deals, accounting for about 40% of the total capital flowing into Indian startups during that period.

The state of Karnataka has around 12,847 active startups and 136 soonicorns (companies expected to become unicorns) as per Tracxn data.

These numbers aren’t just big, they’re sustained, showing that the ecosystem has both depth and momentum.

What Powers Bengaluru’s Edge

Several factors combine to make Bengaluru attractive for entrepreneurs:

• Talent & Education: Bengaluru is home to top institutions like IISc and IIM-B, plus many engineering colleges. This provides a steady flow of both tech and non-tech talent.
• Access to Capital: VC firms, angel investors, and early-stage funds are concentrated here. The high volume of funding in recent years is a sign that investors see Bengaluru as relatively lower risk with high upside.
• Startup Density & Network Effects: More startups make it easier to find mentors, partners, service providers, and even cofounders. Ecosystems with density have vibrancy: shared knowledge, events, and better infrastructure support.
• Supportive Infrastructure & Policies: Karnataka’s policies around IT/BT, incubators, regulatory support, and local government’s willingness to facilitate startup growth play a role.

Challenges and Why Others Are Rising

Even though Bengaluru has many advantages, it’s not without challenges:

• Cost of living, real estate, and wages are often higher than in many Tier-2 or other Tier-3 cities.
• Traffic, commuting challenges, and infrastructure stress (public transport, roads, water, etc.) remain issues.
• With other cities like Hyderabad, Pune, Chennai showing growth, entrepreneurs are beginning to look at alternate but less crowded hubs.

Should You Base Your Startup in Bengaluru?

It depends on what you need:

If your startup needs global investor visibility, specialized technical talent, access to many cofounders, early adopters, or partners, Bengaluru offers unmatched advantages. Many large startups scaled fastest because of the acceleration effect this city provides.

If your product/service is more localized, low-op cost, or you care about lower expenses, you might succeed just as well in a smaller city, if you can tap into remote talent and digital infrastructure.

Founder’s Fortune Cookie

Bengaluru remains the preferred city for many Indian entrepreneurs because it offers the richest mix of funding, talent, network, and ecosystem infrastructure. Future founders must to evaluate whether the extra advantages of their chosen site outweigh the costs, or if alternative locations can provide comparable advantages with less disadvantages. Bengaluru is still a great place to start scalable businesses, but it’s not the only practical choice anymore.

Also Read: Equilibrium Raises $3 Million Seed Round To Scale Carbon Removal Across Nine Indian States