Bengaluru may have hogged the startup spotlight in recent years, but Hyderabad has been working towards building one of the strongest foundations for a powerful startup ecosystem and hub in India. In fact, there was a time when it was believed that Hyderabad would give Bengaluru a tough competition.
At the peak of its IT revolution, Hyderabad was home to biggies like Microsoft, Facebook, and Google. A common anecdote of the time was how then Chief Minister, Chandrababu Naidu, managed a meeting Bill Gates and convinced him to start Microsoft’s Research Centre out of Hyderabad. However, political issues like the Telangana movement put a halt to Hyderabad’s march towards becoming the predominant startup hub.
A group of government officials, investors, incubators and startups in Hyderabad are now attempting to make up for lost time. The results are already visible. Global e-commerce major Amazon chose the city as the home for its largest warehouse, which is capable of storing about two million products. Uber too is setting up a state-of-the art facility in Hyderabad, which will eventually be its largest international office.
Young and upcoming startups are also getting a boost. YourStory currently tracks 1,800 startups in Hyderabad.
Image created by Aditya Ranade
Funding galore
Before we get into the different ingredients, that make a truly powerful Hyderabadi startup biryani, here is a sneak peek into the funding details in the city:
Image created by Aditya Ranade
Funding trend in the past five years in Hyderabad:
Image created by Aditya Ranade
The Hyderabad Startups
Apart from mobile-app-focussed startups like CanvasFlip, AppVirality and Zify, the health and wellness sector appears to be dominating the scene in terms of funding with the likes of ManageMySpa, Zapluk, MapMyGenome, Truweight and Healthians getting investments. Others include Pricejugaad and MySmartPrice.
Image Created by Aditya Ranade
In September last year, a NASSCOM report showed that close to eight percent of the startup activity in India is happening in Hyderabad. Sanjay Enishetty, 50K ventures, says that by 2018, the Hyderabad Startup Ecosystem will possibly be bigger than the Bengaluru Startup Ecosystem.
Speaking of the quality and kind of startups that are seen in Hyderabad, Sateesh says that like most startups across India, those in Hyderabad are also jumping on the hyperlocal and e-commerce bandwagon.
However, over the past few years, the kind of startups that have grown in Hyderabad are in the enterprise software, commerce, and healthcare sectors.
The entrepreneurs themselves
Along with the growing number of entrepreneurs and people starting up, the quality of people starting up is also improving. Ramesh says that the quality of entrepreneurship in the city has seen a significant improvement in the past year.
“In Hyderabad, there is this strong trend of people with solid corporate experience quitting their jobs and starting up. This in itself helps improve the quality of entrepreneurship. The entrepreneurs have an understanding of the different elements and aspects of a business. They aren’t necessarily knowledgeable on everything, but they understand that there are different aspects,” says Tom Thomas, COO, CIE Hyderabad.
However, those who have seen Hyderabad grow as a startup hub say that quality of entrepreneurs has always been high. “You look at the top names in the healthcare and pharmaceutical world. The entrepreneurs are from Hyderabad. People from Hyderabad have always been great at entrepreneurship and setting up businesses,” says Sateesh Andra, Managing Director, Endiya Partners.
So what are the key ingredients that make Hyderabad a great startup ecosystem?
I. The infrastructure
For any startup to thrive, apart from the product, you need the right team and infrastructure in place. And Hyderabad has ensured that the city has a strong infrastructural base. In fact, the infrastructural foundation of the city was laid in the early 2000s.
“Hyderabad today can be considered amongst the cheapest metros in the country. The seeds of a strong infrastructural base were sown early on, and now we are just adding to it,” says Ramesh Loganathan, VP Products and Centre head, Progress Software, and one of the city’s most sought-after mentors and advisors.
Building an incubation ecosystem – T-Hub
There possibly has not been a better time for startups in India, with the Startup India initiative and more recent announcement. But with Hyderabad specifically, there has been a surge in government support. Recently, the youngest state in the country, Telangana made headlines with the announcement of its largest incubation centre in India – T-Hub.
It is believed to be one of the most powerful and ambitious projects that has been taken up by the government. K T Rama Rao, who was an IT professional for six years and is now the IT Minister of Telangana, has said that the T-Hub is not for Telangana techies alone, but is also meant to attract talent from across the country.
The Telangana government is also in the process of setting up two more incubation centres in the gaming and animation and aerospace sectors soon Located in the IIIT campus, T-Hub is called ‘the incubator of incubators’ by mentors and incubator heads in Hyderabad.
Explaining this, Ajit Raj of T-Hub says that the aim of the incubation centre is to create a complete ecosystem for startups. “The main idea here is to build a support system that is so strong that startups don’t find it difficult to get advice, mentorship, funding and infrastructure. For that, we not only have our own incubation centre, but also have tie ups with the likes of NASSCOM, CIE and others to help incubate their startups as well,” adds Ajit.
Ratan Tata, when he inaugurated the T-Hub, said, “Walking around the T-Hub building made me realise that we are entering into a new phase of entrepreneurship, innovation and enterprise in India. It is enterprise that is non-traditional and focussed on innovation of the mind. This was what elevated the US in the 80s into a new world of technology and hi-tech. It changed the way we lived. A facility like T-Hub gives you a sneak-peek into the new India of tomorrow.”
Aditya Vuchi, Founder, Zippr, a Hyderabad-based tech startup, says it has never been easier to start up in Telangana. He is hoping for a collaboration between Central and State departments.
The T-Hub, on Monday, also announced its incubation programme LAB/32. In this programme a few handpicked startups will not only be able to access top mentors in the industry but also will be given the opportunity to pitch to VCs and angel investors across the globe. Some of the mentors include Gautham Seshadri of Aarin Capital and Keerti Melkote of Aruba Networks.
The academic incubation centres
“When I was working at the CIE there were close to 11 startups in the centre, and close to a year later, when I was leaving CIE, there were close of 70 startups in the incubation centre,”says Manoj Surya, Founder of Zenty. Apart from CIE in IIIT, the other incubation centres are at ISB and BITS Pilani.
Praveen Dorna, Co-Founder Startup Byte and the Head Incubation manager at CIE says that the kind of entrepreneurs at CIE aren’t very different from entrepreneurs elsewhere, but the idea is that the incubation centre provides a solid base for founders who are looking to build great products and need support of infrastructure, mentors and advisors.
Co-working spaces
Raghuveer Kovuru, Startup Coach and Community Animator at Co.Lab.Orate says that while startup activity in Hyderabad cannot be compared to Bengaluru, the city is nevertheless working slowly and steadily to become a strong ecosystem base.
“The idea of a co-working space is to build community and help startups spend less on office spaces. They focus on building the product and talent base,” says Raghuveer. He adds that there is more collaboration and networking in a co-working space.
In most co-working spaces, there are events and talks on funding, growth, and key advice that any first-time entrepreneur would seek.
II. People
Startups and startup ecosystems are defined by the kind of people who form the startups or the ecosystem. In Hyderabad, with government support and infrastructural elements in place, it is now up to the entrepreneurs to build and develop this ecosystem.
Availability of talent
The growing number of top education institutes in the city not only ensures great incubation centres, but also that startups get the much-needed tech talent and people. Ramesh says that after Bengaluru, Hyderabad possibly has the most thriving talent pool across different sectors. The city has seen growth and development across different verticals, ensuring that the talent has grown to an exponential level in the city.
An interlinked network
Looking at the growing number of entrepreneurs and startups in Hyderabad, key advisors, mentors, incubator heads and investors decided to get together and help entrepreneurs in the city. The idea was simple; it was focussed on helping the startups leverage the experience and understanding of mentors and investors.
Today, Hyderabad is among the most accessible and connected ecosystems in the country.“Everyone is open to talk to and the kind of advice one gets is very open and constructive. This is because, everyone wants the ecosystem to grow and thrive,” adds Manoj.
Sanjay says that when 50k Ventures first started in 2007-08, there weren’t many people to look up to or turn towards for advice. But today, he says that the ecosystem is working as one strong unit helping everyone grow and thrive in their own way.
Stitching the loose ends
While there are different ingredients in place, the Hyderabad startup ecosystem still needs to see the kind of funding that Bengaluru sees. While interconnected and with decent infrastructure in place, the city lost a good part of a year in political conflicts.
Even if there is decent technical skill and talent in the city, startups in Hyderabad will need to compete with Bengaluru-based startups that have deeper pockets. “We have different ingredients in place, we now need to start attracting people from different cities,” adds Tom.
While it might seem that every metro in the country is aiming to be a startup hub, Hyderabad is truly working on different aspects to achieve that end goal. “Everyone talks about the infrastructure, talent and growth opportunity, but it is about using the different elements and truly building a powerful startup ecosystem, and Hyderabad is working tirelessly as one unit towards that end,” says Ramesh.
Girls in Tech
(GIT) a global non-profit organization focused on the engagement, education and
empowerment of women in technology and entrepreneurship launched its India
Chapter in Hyderabad.
Founded in
2007, Girls in Tech was born out of the need to provide a platform for women to
cultivate ideas, learn new skills, and advance their careers in STEM (Science,
Technology, Engineering and Mathematics) fields. GIT is headquartered in San
Francisco, CA (Silicon Valley).
The vision of
Girls in Tech India is to support and raise the visibility of women in STEM,
entrepreneurship and innovation. Women and girls who join GIT, and who attend
GIT events will find a warm supporting network of like-minded colleagues and
friends sharing similar interests.
In his
remarks as Chief Guest, Consul General Michael Mullins commented, “Science and
technology partnerships that the United States forms with other countries
addresses critical issues that concerns the whole world. Cooperation in science
and technology can foster a global environment where invention, innovation, and
industry can thrive. Science and technology cooperation strengthens our
international relationships because these disciplines are based on values that
transcend politics, languages, borders, and cultures.”
GIT has
hosted and facilitated workshops, seminars, exchange programs and hackathons
all over the world to bolster women and girls’ interest in and enthusiasm for
STEM, entrepreneurship and innovation. GIT’s newly launched Girls in Tech India
has exciting plans for upcoming programs to build a STEM-minded community here
in Hyderabad, and more broadly across India.
Growth was on the back of improved economic activity seen during the past six months that led to a better market sentiment
Hyderabad saw a 67% increase in residential unit sales during 4Q14-3Q15 compared with the same period a year ago. The number of units sold stood at 7,000 during the period as against 4,200 last year.
The growth was on the back of improved economic activity seen during the past six months that led to a better market sentiment. Corporate houses were also coming in as the political environment has improved with the formation of Telangana, said real estate research firm JLL in its report on Monday.
As the government goes all out to bring investments, heightened economic activity can be expected to further bolster the residential realty market.
In the last three quarters alone, launches picked up increasing by more than 1.5 times since last year. Capital values also witnessed a significant rise of 5-10%, year-on-year, after many years of seeing sub-5% rate of appreciation. JLL stated the city was likely to witness further price rise going forward.
Western sub-market
As of 3Q15, the western sub-market has already gone past the previous highs of 2008 in terms of launches. Being the key IT hub with Hitec City and Gachibowli as its main precincts, the area has seen over 85% new launches in the past three quarters of 2015.
Meanwhile, the upcoming metro rail will boost the East-West corridor. As the existing commercial hubs of Hitec City and Gachibowli get saturated, the eastern sub-market - with its comparatively lower rates - will provide for a new alternative and spur growth in an otherwise-dormant side of the city's real estate market, it stated.
Proposed satellite townships along the outer ring road (ORR) and the Tellapur integrated township project will have a long-term impact, it said.
HYDERABAD: The announcement of sops for real estate sector by the government has given a boost to the sector in Hyderabad as new projects, which have been held up for a year and a half, are getting ready to launch soon.
With the government relaxing most of the rules on common built-up area, reduction in the impact fee and non-agricultural land assessment tax, builders are expected to gain considerably.
“Due to relaxation given by TS government, the sector will come out of the deadlock kind of situation witnessed for the past four to five years. The reduction in the impact fee is expected to transform the skyline of Hyderabad, ensure ease of doing business and attract national players to the city,” said K Sreedhar Reddy, vice-president of Telangana Real Estate Developers Association (TREDA).
The relaxations were announced after many rounds of deliberations between the government and realtors and the CM okayed most of the requests. Though most of the sops announced had been agreed to by the government long ago, the announcement was delayed due to various reasons.
“The new rules and relaxation will apply only for new projects. Therefore, many builders and developers have held up their layouts and constructions. Now, they are ready to take up work,” said Gummi Rami Reddy, president of the Confederation of Real Estate Developers Association, Hyderabad chapter.
For instance, in the case of NALA tax itself more than 600 cases are pending in court where builders have held up their launches. With reduction of NALA tax all these pending cases will be cleared.
Similarly, compulsory allocation of a part of land for the housing of economically weaker sections in case of layouts with open plots, collection of value addition charges in Cyberabad Development Area, provision of 40-ft peripheral road in gated communities and others were also abolished.
Besides doing away with certain compulsory provisions, the government has also taken some decisions which will bring about major changes like allowing construction of floors above multiple portions, allowing stilt floor in smaller plots of 200 square metres, allowing amalgamation of plots in congested areas like old city subject to the condition that maximum plot size before amalgamation shall be 100 square metres and minimum plot size after amalgamation be 300 square metres.
Major Relaxations
Construction of floors above multiple portions and stilt floor in smaller plots of 200 sq mt will be allowed
Impact fee, non-agricultural land assessment tax reduced
Buffer strip along Musi river reduced from 100 to 50 metres
No compulsory allocation of a part of land for housing of economically weaker sections in case of layouts with open plots
Collection of value addition charges in Cyberabad Development Area
Provision of 40-ft peripheral road in gated communities
‘Rising Costs Causing Project Delays’
B Seenaiah, former president of the Builders Association of India and chairman of the organising committee of All India Builders Convention being held in Hyderabad from Friday to Sunday, explains about the problems being faced by builders. Excerpts:
How is the building sector now?
The building and construction sector is plagued with various problems, the major being rising costs and project delays. As a result, several builders and contractors are unable to recover the amount they have invested in projects.
What are the reasons for it?
There are many reasons ranging from huge rise in the cost of construction material to lack of proper planning by the government and other agencies which award contracts. For instance, in some cases governments call tenders for contract works even though they do not have a budget allocated for it. This pushes the contractors into trouble.
What then is the solution?
The system of contract works needs streamlining. We need the support of the central and state governments to solve issues. There is great need for protecting the interests of the construction sector which one of the highest tax-generating sectors for the government and is also labour-intensive and creator of jobs.
How is the sector faring in Hyderabad?
Clarity is yet to emerge after bifurcation. People, builders and investors are in two minds whether to prefer Hyderabad or AP.
Isn’t construction of the AP capital an opportunity for builders and contractors?
AP capital will provide opportunities but it will take a long time for it to be developed. The government has to shift employees and administrative machinery before any construction activity can start there in real sense.
The latest sop by the state government is likely to benefit about five lakh house owners in Greater Hyderabad HYDERABAD: Just days before releasing the notification for elections to the GHMC, the state government issued orders reducing property tax to a nominal Rs 101 per year from house owners who have been paying tax up to Rs 1,200 per annum till now. The latest sop by the state government is likely to benefit about five lakh house owners in Greater Hyderabad.
The Municipal Administration and Urban Development department issued the GO on Thursday amending Section 202 A (1) of the GHMC Act. According to the amendment, "The government may exempt any residential building occupied by the owner from property tax where the Annual Rental Value does not exceed Rs 4,100 (i.e. Rs 1,200 property tax per annum) subject to the condition that the beneficiaries of exemption shall pay a nominal amount of Rs 101 per annum towards property tax."
KCR, a couple of months ago, announced the decision to reduce the property tax mainly to woo voters. Whether the government would adjust the amount in future for those who have already paid the amount for the current financial year is not known.
The department also made amendments raising the cost limit of works being taken up by the GHMC. Until now, the standing committee has powers to sanction works up to Rs 50 lakh and works costing above Rs 50 lakh require administrative sanction from the government.
As several projects are piling up for clearances, the powers of the standing committee have been raised up to Rs 3 crore. Similarly, works up to Rs 6 crore can be taken up with the approval of the standing council. Any developmental works costing more than Rs 6 crore need to be sent to the state government for clearance.
HYDERABAD: The 76th All India Industrial Exhibition, 2016, organized by the Exhibition Society will begin from January 1 at Exhibition Grounds here. Telangana Chief Minister KCR will inaugurate the one-and-half-month long shopping event, popularly known as ‘Numaish,’ said Finance Minister and Exhibition Society President Eatala Rajender.
About 2,500 stalls, (with representation from different states across the country) have been allotted to various exhibitors including State and Central govt Departments and PSUs besides Corporate and MNCs, Rajender said adding free Wi-Fi service will be provided to visitors this year.
The Exhibition Society has been conducting the expo at Hyderabad for the past 75 years. The earnings from this exhibition are utilized to support 18 educational institutions in Telangana with special emphasis on girls and women education, Exhibition Society President said. The Numaish will be held from Jan 1st 2016 to Feb 15th 2016 and the exhibition’s daily timings are 3:00 pm to 10:30 pm.
Stallholders are expected to erect the stalls at their own expense. The organizers shall provide electricity on a pay per use basis. Common amenities such as washrooms, drinking water and campus wide security shall be provided and the charges for the same are included in the stall space fees.
The Exhibition Society, a non-profit organization was started in 1938 to promote industrial development in the erstwhile Hyderabad state by organizing industrial exhibitions to promote products manufactured by small and medium scale industries within the country.
Prime Minister Narendra Modi on Wednesday pushed for early completion of the Hyderabad Metro Rail Project as he reviewed the progress of vital infrastructure projects in road, railway, metro rail, power and food processing sectors spread over various states.
The projects in the states like Delhi, Haryana, Uttar Pradesh, Bihar, Jharkhand, West Bengal, Odisha, Chhattisgarh, Maharashtra and Telangana were reviewed by Modi at the eighth meeting of PRAGATI (Pro-Active Governance And Timely Implementation), an IT-based platform of tele-conferencing with top officials of states.
Reviewing the Hyderabad Metro Rail Project, the Prime Minister exhorted all authorities concerned to complete this PPP project at the earliest and with the best possible quality, a PMO statement said.
Among other significant projects reviewed were the Eastern Dedicated Freight Corridor and the Delhi-Haryana-Uttar Pradesh Eastern Peripheral Highway, it said.
Reviewing the Food Park Scheme, he called for a comprehensive evaluation of the benefits from the Parks that have already been completed.
Modi also reviewed and pressed for early completion of the Kaladan Multi-Modal Transit Transport and Rih-Tedim Road Project in Myanmar, which he described as one of the corner stones of India's 'Act East' policy, the statement said.
He also took stock of the progress towards Direct Benefit Transfer under MNREGA, and end-to-end computerization of Targeted Public Distribution System (TPDS) operations. PRAGATI meetings are held on last Wednesdays of every month.
