Increase in startup incubators; South India leads pack, tier-1 cities housing half: IIT-Madras, IIM-Bangalore report

Chennai has a high proportion of academic incubators at 82 per cent, whereas Bengaluru and Gurugram have a high proportion of industry incubators at 71 per cent and 84 per cent respectively.

Startup incubators rise in south with tier 1 cities housing half of them: IIT Madras, IIM Bangalore report

The Southern region leads the pack, housing 45 per cent of all incubators and having the highest density of incubators.

The number of incubators in the Indian ecosystem has grown steadily, with more than 1,100 active incubators dotting the Indian startup ecosystem, reveals a report jointly presented by the Indian Institute of Technology, Madras (IIT-M), Indian Institute of Management (IIM), Bangalore‘s NSRCEL, startup incubator of the management institute.

The Southern region leads the pack, housing 45 per cent of all incubators and having the highest density of incubators.

The report titled, ‘India Incubator Kaleidoscope 2024’ shows that tier 1 cities house almost half of all incubators that is 48 per cent. Chennai has a high proportion of academic incubators at 82 per cent, whereas Bengaluru and Gurugram have a high proportion of industry incubators at 71 per cent and 84 per cent, respectively.

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The incubator density is 0.8 incubators per million population according to the report, whereas countries like US, UK and China range between 8 and 10 incubators per million population.

The rate of incubation is high among deep tech sectors such as AI/ML, Data Analytics, Biotech and other sectors. All of them have an incubation rate upward of 12 per cent and are sought after by students, young professionals, women founders and those with modest financial resources.

Despite being smaller in number, incubated startups have won more awards in all the leading startup awards. Incubated startups have also been engaged more actively in the creation of intellectual property – the percentage of incubated startups that have published patents is about 5 times more than that of the non-incubated, says report.

Incubated startups have been able to secure their first round of funding earlier than the non-incubated. While 27.1 per cent of the incubated startups received their first-round funding within one year of incorporation, the corresponding percentage for the non-incubated was 15.4 per cent.