South India has emerged as a thriving hub for start-ups, playing a pivotal role in catalysing economic growth and fostering innovation across the region. With its strong talent pool, robust infrastructure, and favourable government policies, the South contributes significantly to India’s burgeoning start-up ecosystem, which ranks third globally in the number of start-ups and funding received.

The region hosts 45 per cent of India’s incubators, showcasing its commitment to nurturing entrepreneurial talent. Key cities like Bengaluru, Chennai and Hyderabad have strengthened their positions as innovation epicentres. Bengaluru, often dubbed the “Silicon Valley of India”, is home to a robust tech ecosystem, while Chennai leads in SaaS (Software as a Service) innovation. Hyderabad and Kerala are also witnessing exponential growth in diverse sectors, including health-tech, agri-tech, and ed-tech.

Around 34,000 or 28 per cent of India’s start-ups have been established in the South, with a year-on-year growth rate averaging 40 per cent. These ventures have tremendous employment generation potential, with start-ups in the South employing around 3.5 lakh people currently. And of these start-ups in the South, around 16,000 are operated by women entrepreneurs and about 13,000 have been established in tier-2 and tier-3 cities, showcasing the integral role they play in ensuring inclusive and regionally balanced growth.

Revolutionising industries

The region’s start-ups are revolutionising industries. Over 36 per cent of start-ups in the South focus on IT services, leveraging the region’s skilled workforce and technological infrastructure. Start-ups in the food and beverages sector, representing 16 per cent of start-ups, are innovating in sustainable and health-conscious products.

And start-ups in the biotech sector, accounting for 13 per cent of the region’s total, address critical challenges in healthcare, especially through telemedicine and wearable technology. The SaaS sector has seen remarkable success, with companies like Zoho and Freshworks achieving $500 million revenue milestones. Emerging ventures like Agnikul Cosmos (space-tech) and eKincare (health-tech) reflect the diversity and ingenuity of South Indian entrepreneurship.

The Confederation of Indian Industry (CII) has been instrumental in nurturing the South’s start-up ecosystem. Initiatives like CII Connect and CII Innoverge provide platforms for start-ups to connect with industry leaders, investors, and policymakers. These events foster collaboration and innovation, aligning with the region’s growth trajectory.

Despite the region’s success, challenges remain. The South’s incubator density is only 0.8 per million population, far below the 8-10 per million seen in countries like the US and China. Funding access and infrastructure gaps in Tier-2 and Tier-3 cities also pose hurdles.

However, opportunities abound. Initiatives like Startup India, Digital India, and State-specific policies provide incentives for innovation. With 27 per cent of incubated start-ups securing first-round funding within a year of incorporation, compared to 15 per cent for non-incubated ventures, the benefits of a structured support ecosystem are evident.

South Indian start-ups are not only driving economic growth but also addressing critical societal challenges. From sustainable ventures like Selco Solar to deep-tech innovations in AI and biotechnology, the region’s entrepreneurial ecosystem is evolving into a global powerhouse.

The writer is Chairperson, CII Southern Region, and Managing Director, Chandra Textiles Pvt Ltd