How Hyderabad is Charming Start-Ups to Set Base in City

For Purple Life Sciences founders—Manikanta Kancharla Reddy and Raghavender Reddy Bavaji—it was a complete no-brainer. Their start-up was to be birthed in Hyderabad.

“It offers a perfect blend of infrastructure, talent pool and ecosystem for a health sciences start-up like ours. It is a hub for biotechnology, pharmaceuticals and innovation, making it ideal for a research-driven company,” says Reddy.

Hyderabad’s transformation into Cyberabad did not happen overnight. Successive state governments laid down policies that successfully wooed entrepreneurs and investors.

“The Telangana government’s pro-start-up policies, such as ease of doing business, incentives for innovation and tax benefits, have significantly supported our growth. Initiatives like T-Hub [a start-up ecosystem enabler] and AG Hub [an innovation centre for agri and food start-ups] from PJTSAU [Professor Jayashankar Telangana Agricultural University] are game-changers for start-ups,” says Bavaji.

Outpacing traditional business epicentres like Bengaluru and Mumbai, the capital of Telangana has emerged as the top destination for entrepreneurship in the country. According to Outlook Business Outperformers, Hyderabad clinched the top spot among 44 cities evaluated, with a score of 88.7 out of 100.

The New Hub

In the past decade, Hyderabad has received significant policy support and investments in infrastructure. Key among them is the nine-year-old T-Hub, now in its 2.0 avatar and the world’s largest technology incubator. Since its inception, T-Hub has designed and delivered more than 100 innovation programmes and enabled over 2,000 start-ups across different sectors to scale up.

“At a broad level, sectoral focus will be guided by the vision and mission of T-Hub as well as the government’s key focus areas,” says Jayesh Ranjan, special chief secretary, information technology and industries, Government of Telangana.

Why should businesses choose Hyderabad over other cities?

There are a number of reasons. First, the city currently ranks higher than most of its peers in human capital and knowledge edge, and macroeconomic indicators. Be it cheaper offices or affordable living, Hyderabad delivers on all parameters crucial to attracting the entrepreneurs of the country.

Entrepreneurs also prefer Hyderabad for its environment and quality of life. “I lived in Hyderabad for a year, and I would choose Hyderabad over Bengaluru and Mumbai any day,” says Shweta Kukreja, founder of The Marketing Anatomy, a marketing-solutions firm.

In fact, the state is trying to create an environment that focuses on not just attracting companies but also retaining them through its ecosystem of global capability centres (GCCs).

“The entities came in for cost advantage but today are moving up the value chain, driving innovation and business transformations. This is creating opportunities for talented youth,” says Ranjan.

Incubator of Talent

According to a report by TeamLease Services, a human-resources-services company, nearly half of the businesses in Hyderabad are looking to expand their workforce. “The city is leading in hiring for tech start-ups, ecommerce, fintech, health care and BPO [business process outsourcing]; it is the prime destination for new job opportunities,” says Kartik Narayan, chief executive of staffing at TeamLease.

To fuel the entrepreneurial ecosystem, the city is home to some of the best education institutes of India such as Indian School of Business and International Institute of Information Technology-Hyderabad. These institutes, coupled with the presence of global giants like Google, Microsoft and Amazon, form a strong pool of skilled professionals.

“For a lot of start-up verticals such as auto service, Web3 and SaaS [software as a service], Hyderabad has become the launchpad,” says Neeraj Tyagi, co-founder of We Founder Circle, a start-up investment platform.

Yet if the state has been able to use the talent pool and develop Hyderabad into what it is today, despite having limited venture capital and top-tier start-ups, it is only due to the combination of various policy measures and the city’s wealthy who are ready to back start-up ideas.

According to Knight Frank’s Wealth Report 2022, Hyderabad housed 467 ultra-high-net-worth individuals with a net worth exceeding $30mn (over Rs 225 crore) in 2021. This places the city second in India, trailing only Mumbai.

Teaming Up

T-Hub’s international arm, T-Bridge, is planning innovation-centric programmes with France and seeking learning opportunities for its health-tech start-ups in the UK. BioAsia 2025, a life sciences and health-care event to be held later this month, would also be a leg up.

In Japan, T-Hub has already partnered with companies like Panasonic and Suzuki and aims to become the innovation partner through the Japan International Cooperation Agency to support start-ups in sectors like electric vehicles, agritech and supply chain solutions. It has also collaborated with Israel to focus on defence and security.

For now, Hyderabad has become the place where dreams are built, funded and scaled to global heights.