4 months ago
1
“We started up here simply because we didn’t want to permission this place. We emotion the formation and the coast, and we wanted to physique thing without letting spell of immoderate of it,” says Mayur Shetty, CEO at BlackFrog Technologies, a aesculapian instrumentality manufacturing institution based retired of Manipal. His vocation decisions, helium says, were shaped by the question of what helium could do to debar moving to Bengaluru.
The sentiment may resonate with many.
The IT roar of the 1990s catapulted Bengaluru to being the economic powerhouse that it is today. The city’s publication contiguous to the State’s GSDP is disproportionately ample astatine 43%. But the economical prosperity’s darker side reveals crumbling infrastructure, strained civic amenities and high cost of living.
It was in 2021 that the Karnataka Digital Economy Mission (KDEM) launched the Beyond Bengaluru Mission with the goal of driving distributed maturation of Karnataka’s integer system extracurricular Bengaluru.
Almost 5 years down the line, aggregate schemes, policies and grants person been introduced nether the initiative to promote companies to grow to tier-2 cities in the State and to boost entrepreneurship in districts. The initiative has been making progress – albeit unevenly - across clusters. Meanwhile, entrepreneurs, manufacture leaders and ecosystem players in these regions hope to spot more in the coming days.
Bringing industry person to talent
B.V. Naidu, chairman at KDEM, recalls that arsenic aboriginal arsenic 1998, when helium was heading Software Technology Parks of India (STPI), a tier-2 STPI Centre was established in Mysuru. In 2001, similar centres were established in Hubballi and Mangaluru.
Despite this aboriginal push, tech growth did not take disconnected arsenic expected in these regions owing to a lack of sustained absorption from the governments that followed.
“Having closely observed the scenery and imaginable of these regions implicit the years, we made Beyond Bengaluru 1 of the halfway missions erstwhile KDEM was established,” helium says.
The reason, according to him, is straightforward — the availability of talent owing to the historically beardown acquisition instauration successful places similar Belagavi, Mysuru, Mangaluru and Hubballi, which boast of immoderate of the oldest and astir salient engineering colleges successful the country. However, owed to the lack of section manufacture opportunities, a ample information of this wide endowment excavation migrated to Bengaluru oregon different tier-1 cities.
Our cardinal question was, Naidu says, alternatively of endowment moving to where industry exists, tin we bring industry person to wherever the endowment already is?
Hub and spoke model
Three clusters — Mysuru, Mangaluru and Hubballi-Dharwad-Belagavi (HDB) — were identified initially, followed by Kalaburagi, Shivamogga, and Tumakuru.
“Each clump besides supports neighbouring districts. For example, the Mangaluru clump volition besides powerfulness Udupi and, to immoderate extent, Kodagu and adjacent regions. Similarly, the Mysuru clump volition screen Chamarajanagar and Mandya. This is the essence of the cluster-based approach,” says Manjula N., Secretary to the Government of Karnataka for the Department of Electronics, Information Technology, Biotechnology, and Science & Technology.
The extremity has been a ‘hub and spoke’ exemplary development, wherever Bengaluru volition proceed to turn and remain the halfway hub, portion different locations would relation arsenic spokes.
“This helps negociate costs, which are increasingly high in Bengaluru, and allows for scalable expansion, portion tapping into determination endowment and resources,” notes Mr. Naidu.
Many incentives similar onshore subsidies, which are not disposable successful Bengaluru but successful the clusters, are specifically designed to promote companies to spell beyond Bengaluru.
Tailored incentives
“In addition, the authorities actively supports companies successful identifying the astir suitable locations, whether for manufacturing oregon bureau rentals, and works intimately with the developer community. We person booster kits for startups arsenic good arsenic GCCs, each aimed astatine improving easiness of doing business,” explains Ms. Manjula.
Data from KDEM shows 138 caller companies starting operations and 35 companies expanding to these clusters in the past 4 years, resulting in the instauration of 9,281 jobs. Multiple GCCs person besides started operations successful immoderate of the clusters.
“IBM, for example, started operations in Mysuru and continues to turn there. A fewer different companies person followed suit, and 1 much ample institution volition soon grow to Mysuru,” says Mr. Naidu.
“Two work companies person established operations successful Chamarajanagar. EG and Bose person acceptable up GCCs successful Mangaluru. Six to 7 companies person travel up successful the Hubballi–Dharwad–Belagavi cluster,” adds Ms. Manjula.
Beyond Bengaluru startups
The interest from ample companies prompted the officials to widen the absorption to startups beyond Bengaluru too.
Investor-focused transportation events called Beyond Bengaluru Investor Ecosystem (BLUE) and Karnataka Acceleration Network (KAN) that connects Bengaluru-based accelerators with accelerators successful different clusters were formed arsenic portion of this.
In addition, the authorities introduced the ₹75-crore Beyond Bengaluru Cluster Seed Fund and the Local Economy Accelerator Programme (LEAP), a five-year-long initiative with an outlay of astir ₹1,000 crore, to enactment entrepreneurs from ideation to commercialisation.
While the relation of authorities is captious successful processing ecosystems, it is besides important to support a balance, says Madan Padaki, president TiE Bangalore.
“Several ecosystems are artificially pumped up by the governments. The balancing relation of the authorities is very critical. If you bash excessively overmuch oregon excessively little, there’s a challenge. Karnataka seems to find that balance. KDEM is an manufacture organisation wrong the government. That substance is very critical,” helium notes. Mr. Padaki besides points retired however section manufacture leaders, with authorities support, relation arsenic anchors successful each cluster.
The silicon beach
Rohith Bhat, who founded Udupi-based Robosoft Technologies and is presently the CEO of 99 Games, recalls however a fewer years back, delegates brought successful by KDEM to showcase the Mangaluru clump turned down the connection of mounting up their businesses successful the portion citing deficiency of prime infrastructure.
“Mangaluru has bully prime of life, it has been the centre of education, producing 20,000 STEM graduates and 10,000 engineers each year. But the infra portion was missing, which dissuaded the delegates then. So, we got unneurotic and decided we person to lick that problem,” says Mr. Bhat, who is besides the founding president of TiE Mangaluru chapter.
Industry leaders enactment their heads unneurotic to travel up with strategies to make a startup ecosystem successful the region, arsenic good arsenic to pull GCCs and nano GCCs. The moniker ‘Silicon Beach of India’ was coined for branding. Momentum picked up. In 2025, Denmark-based EG opened their 3rd bureau and Bose Professional established its archetypal R&D centre extracurricular the U.S. successful Mangaluru.
“In 2023, determination were astir 15,000 IT employees successful the portion producing ₹3,300 crore successful revenue. Today, we person astir 27,000 IT employees successful this region, generating much than ₹4,500 crore successful revenue. That is much than 40 companies, large and small, adding 8000+ jobs successful the portion successful 2 years,” notes Mr. Bhat.
Notable startup-exit stories from the portion see Novigo Solutions’ acquisition by R Systems for ₹950 crore, Niveus Solutions’ takeover by NTT DATA, and Robosoft’s acquisition by Japan’s TechnoPro Holdings for astir ₹800 crore.
Missing pieces
While the region’s translation has been commendable, startup founders anticipation for more. According to Mr. Shetty from BlackFrog, 1 of the biggest needs of the ecosystem is connectivity and easier entree to cities similar Bengaluru.
“You request to task that you are not acold disconnected successful immoderate distant island. Better connectivity to Bengaluru would beryllium a large archetypal measurement if the authorities is superior astir supporting companies beyond Bengaluru,” helium says, adding that the beingness of VCs successful the portion is astir nonexistent.
Avinash Rao, laminitis of Dharmasthala-based Agrileaf, points retired that basics specified arsenic power, net and h2o are inactive an contented successful places wrong the cluster.
“When I acceptable up the concern 5 years back, I had to spell to Ujire oregon Dharmasthala each time for astir 2 hours, beryllium successful the car, browse and travel back,” helium recollects, adding that startups and businesses successful the districts could bash good with speedy approvals from the government.
While uncovering endowment utilized to beryllium an issue, the “Oorige Banni” (come backmost to homeland) initiative, conceived by the manufacture leaders, has been helping to bring backmost radical who migrated, Mr. Rao notes. “Around 20 members of our unit successful the mid elder roles presently are radical who came backmost from Bengaluru,” says Mr. Rao, who himself worked successful Bengaluru and the U.S. previously.
The proximity problem
Mysuru tin brag of galore things — taste capital, little cognition and surviving costs, amended prime of life, abundance of endowment and debased transgression rate. Global Technology Centre, a 5,000 sq. ft. incubation installation by KDEM, is besides located successful the region. Yet, it has an absorbing problem, which is its proximity to Bengaluru, says Bhaskar Kalale, president astatine EqualizeRCM, Mysuru.
“Companies consciousness that if they tin get the aforesaid level of endowment successful Bengaluru, which is lone a abbreviated region away, oregon bring endowment from Mysuru to Bengaluru, past wherefore unfastened a centre successful Mysore. There are present expanding fig of radical who commute from Mysuru to Bengaluru for work, with amended connectivity successful place,” notes the TiE Mysuru section president, who adds that debased consciousness among radical astir disposable schemes is besides a problem.
When it comes to mounting up startups, Mysuru’s contention whitethorn not beryllium conscionable Bengaluru, accidental some.
“It could besides beryllium immoderate municipality successful Telangana, Andhra Pradesh, Tamil Nadu, oregon Gujarat. We request region-specific incentives that are comparable oregon tin vie with different States,” suggests Pavan Ranga, CEO astatine Mysuru-based Rangsons Technologies. He stresses connected the request for a backing level with government, backstage and nationalist participation.
“Funding is simply a situation for startups successful each tier-2 towns. Ultimately, they person to thrust down to Bengaluru for a gathering with a PE oregon VC fund. And the infinitesimal they perceive you are from Mysuru, a batch of them power off. While determination is immoderate authorities enactment successful the signifier of funds and grants, that’s not capable to make a meaningful disruptive story,” helium says.
Lagging approvals
On being asked wherefore helium chose to commencement his concern successful Belagavi, Maboof Mulla, laminitis of Hoopoe e-Bikes, asks a antagonistic question. “People successful tier-1 cities volition get jobs quickly. What astir jobs for radical successful tier-2 oregon tier-3 towns?”
The Hoopoe e-Bike was launched by Minister Priyank Kharge astatine BTS-2025, pursuing which the startup began to get orders from crossed the State.
“I didn’t privation to permission for bigger cities due to the fact that this is my hometown and I wanted to make occupation opportunities here. I tin lick the ground-level problems present faster than attempting to bash it anyplace else,” helium says.
Nevertheless, deficiency of mentorship has been a challenge, isolated from entree to superior and infrastructure.
“KDEM is trying, but things are moving astatine a dilatory gait successful the HDB cluster. The grants fixed by authorities is inadequate for startups similar us. One of the captious needs is infrastructure. Government has land. If they acceptable tin acceptable up infrastructure determination — buildings oregon adjacent sheds — we could usage it to standard up quickly.”
Yet different situation is the bulk of the approvals that inactive prevarication successful Bengaluru, adds Girish Mane, president astatine TiE Hubli.
Pointing retired that the azygous model support strategy has not been precise effective, helium demands that each approvals for Beyond Bengaluru, existent to the name, should hap extracurricular Bengaluru. While the motorboat of LEAP could beryllium useful, a batch much consciousness should beryllium built astir it, helium adds.
Matter of time
The problems and teething issues withstanding, the overriding feeling is that the ngo is making progress, albeit slowly.
“From a maturity standpoint, Shivamogga is getting there. Tumakuru, due to the fact that of its proximity to Bengaluru, has both an advantage and a disadvantage. Kalaburagi and Kalyana Karnataka definitely need a batch of support. But we’re seeing immoderate greenish shoots of early-stage startups emerging from there,” says Mr. Padaki.
Officials admit that determination are challenges, but are assured that it is lone a substance of clip earlier things prime up pace. KDEM already look to beryllium successful interaction with municipality readying officials successful the clusters to guarantee that the municipality infrastructure grows successful parallel to accommodate the demands that whitethorn travel up erstwhile the ecosystems commencement to flourish.
“KDEM is addressing the issues gradually. For instance, successful the lawsuit of the ESDM sector, our constituent of interaction is continuously coordinating with the Commerce & Industries section to resoluteness land-related issues successful Chamarajanagar. The strategy can’t alteration overnight. Hence, we are trying to enactment arsenic a buffer betwixt bureaucracy and industry, smoothing processes and helping companies navigate regulatory requirements,” says Mr. Naidu.
