Often referred to as the "Silicon Plateau," Bangalore holds many nicknames.  

The green, sprawling capital city of Karnataka, a state in the southwestern region of India, is situated beneath a towering, 2,600-foot tall rock formation called the Mysore Plateau, which is bounded by the Sahyadri Mountains and the sloping Kaveri River. 

Over the past few years, Bangalore has earned the mantle of India's "Silicon Valley." 

Although historically an outsourcing hub, the city is becoming its own technology business center. In 1909, the first Indian Institute of Science was established in Bangalore, and today it has 3,500 students. The school's most renowned education centers for climate change, neuroscience, and engineering have spurred more interdisciplinary research.

Today, Bangalore ranks as the 15th-hottest startup ecosystem in the world, according to a recent report from Crunchbase and research firm Compass. The metropolis counts around 4,900 active startups, with nearly $2.3 billion in company investments last year.

A wide range of startup activity is happening in Bangalore. Internet penetration throughout India, especially, presents many opportunities for digital entrepreneurs. The country's current population is a staggering 1.3 billion, and a July report from the Internet and Mobile Association of India projects that the country will have 500 million internet users by 2017. 

"About half of the startup activity in India is happening in Bangalore," estimates Dev Khare, managing director of Lightspeed India Partners Advisers. Lightspeed India is based in Delhi, but frequently invests in Bangalore companies. "Unlike Silicon Valley, Bangalore has the concentration of people, engineers, investors, and a more easy-going culture where information is shared more easily than in other parts of the country," he says.

FreshMenu is one example of a startup that's thriving in Bangalore. Helmed by founder and CEO Rashmi Daga, the one-year-old company is a health-conscious, chef-prepared food-delivery service that mimics U.S. ventures like Munchery, Blue Apron, and Plated. Last year, FreshMenu received $5 million in funding. 

Today, the company makes around 100,000 deliveries per month and has expanded services to Mumbai and Delhi. Customers pay between 400 to 500 rupees ($8 USD) per order. The company doesn't disclose its revenue, but an average rounding would place sales at an estimated $9.6 million per year.

Counting thousands of engineering and management graduates each year, along with a multibillion-dollar success story (Flipkart), here are a few reasons why Bangalore is looking better than ever for startups.

1. The city is brimming with tech-savvy talent.

Bangalore has a steady pool of engineers and scientists. The city is home to the Indian branches of several U.S. corporate giants, including Amazon, IBM, and Microsoft. Many business owners in Bangalore earned their chops by first working for one of these leading companies. 

Other entrepreneurs return to India to launch startups after putting in time in Silicon Valley or Europe, such as Suchi Mukherjee, who founded the e-commerce retailer LimeRoad in Gurgaon in 2012, after working stints at Skype and Gumtree in the U.K.

Still others start their own companies directly after graduating from high-profile schools, like the International Institute of Information Technology or the Indian Institute of Management, which are typically likened to U.S. schools such as Stanford and Massachusetts Institute of Technology.

"They're starting companies here [in Bangalore] primarily because they see others who are maybe three or four years ahead of them having started companies and doing very well," explains Khare. 

FreshMenu's founder and CEO herself graduated from IIM, and had previously worked for IBM and Johnson & Johnson before launching the business. 

2. Mobile penetration is on the rise.

Tech talent isn't the only reason Bangalore is nurturing startups.

More people currently own a phone than a toilet in India. In fact, by 2017, the country will unseat the U.S. as the second largest smartphone market, according to a report from Strategy Analytics. (Because data correlates mobile usage with a country's population size, China will still be in the lead.) The firm estimates that 118 million smartphones will be sold in India in 2015. 

FreshMenu is seizing on the country's increased mobile phone and internet penetration. Users place an order via the website or mobile iOs or Android application, after browsing the chef-inspired meal offerings, which change daily.

Delivery workers also carry smartphones so they can tune in to FreshMenu's live traffic feed. This tells them which routes to take -- either via bicycle or van -- to make deliveries most efficiently. The wait time for a customer is 45 minutes or less.

Traffic, it's worth noting, is one pain point that entrepreneurs in Bangalore (and more generally in India) frequently face. Khare notes that networking events can only really happen on the weekends, since it's too difficult to travel during commuter hours on a weekday.

3. A strong VC presence, though investors are selective.

India is receiving more attention from foreign VC firms. The Karnataka Information Technology Venture Capital Fund (KITVEN Fund) is one such Bangalore-based institution, created in partnership with the U.K. government to support Indian ventures. 

"There's been an expansion of funding activity in India led by growth capital companies like SoftBank and Tiger and some of the hedge funds around the world," Khare says. These firms have doled out millions to successful startups like FlipKart and Olacabs. 

The number of seed investments is growing in Bangalore. Unfortunately, fewer big investments are made down the road as Series A or B rounds, because larger venture capital firms are becoming more selective. Khare estimates that he funds just one out of every 200 startups that he reviews.  

FreshMenu was lucky enough to secure funding in its Series A round just four months after launching. Some of that money has gone into the company's Mumbai and Delhi expansions. 

4. The ecosystem is collaborative, not competitive.

Bangalore's Koramangala neighborhood, which stretches across the southernmost tip of the city, is a collaborative startup ecosystem. It's home to think tanks like iSpirt, and the nonprofit software organization NASSCOM.

Flipkart was the first to set up camp in Koramangala in the early 2000s. Now, the e-commerce platform is one of India's seven "unicorns" (companies valued at $1 billion or more). Weekend events in the area bring executives together to chat e-commerce, payments, and how to raise capital. The community is arguably more tight knit than Delhi or Mumbai, where startups and their resources are more spread out. 

FreshMenu, which is located just outside of Koramangala, has benefited from its connected pool of tech talent. Presently, the company employs 200 people.

Beyond Koramangala lies TIE Bangalore, a nonprofit entrepreneurship support network that provides entrepreneurs with mentorship, networking opportunities, education, and funding. Another, Open Coffee Club Bangalore, organizes meet-ups with prominent investors, entrepreneurs, and others in the space. 

5. Entrepreneurs are forward focused.

Increasingly, Bangalore-based companies have a vision that extends beyond the immediate future, and even beyond metropolitan centers. Nearly 70 percent of the Indian population lives in rural areas. 

As tech-savvy and connected as it may be, India has far to go before it can be seen as a developed nation. Poverty is especially widespread; nearly 22 percent of the country lives below the poverty line, or makes an income of less than $1.25 a day, according to a recent U.N. report. Sanitation is another major issue, given that 59.4 percent of rural households still have no toilet facilities. The Indian government under Prime Minister Narendra Modi has recently cut its social-sector budget by 30 percent. 

Even so, the city has been quick to embrace the digital revolution beyond its borders. The Bangalore-based media site NewsHunt, for example, delivers 10,000 books and 100 newspapers in 11 separate Indian languages and English. Of that readership -- roughly 70 percent of whom are bilingual -- a person is eight or nine times as likely to read in an Indian language as they are in English, CEO Virendra Gupta recently told the New York Times.

FreshMenu, too, has goals beyond its present reach. The startup modeled itself after successful U.S.-based companies, which Daga found applicable to India as a whole. Essentially, it aims to give more people cheaper access to wholesome foods.  

Today in Bangalore, with its rickshaws gridlocked in the early-morning heat, a delivery worker looks to his app for directions to the next house -- and so, in small part, moves the needle forward for the economy of India. 

Published on: Aug 31, 2015