The big accounting firm Ernst & Young reports that new tech businesses are sprouting in India, netting entrepreneurs nearly US$2 billion in venture capital funding last year, three times more than 2006.
Experienced tech workers at major U.S. information technology companies, who often can’t get a U.S. work visa, are striking out on their own to create the next Facebook, Apple or Google.
Venture capital firms are opening their wallets to fund these new Indian start-ups. In the first six months of this year, VCs invested nearly US$1.3 billion. The U.S. still leads in venture funding with a US$33 billion take. Asian rival China saw an influx of US$3.5 billion VC funds last year.
What’s up in India? Ernst & Young says India’s middle class is expanding rapidly and numbers 50 million people, a large segment with more discretionary income to spend. Although only 5 percent of India’s population now, E&Y believes India’s middle-class will grow to 200 million by 2020.
Internet access also is expanding rapidly, bringing more entrepreneurial opportunities, especially in e-commerce. An Indian trade group says about one-quarter of India’s 1.3 billion population is now connected to the Internet, which pushes India past the U.S. as the second-largest Internet market in the world.
And LinkedIn, the business social media site, claims that five of the top 10 technology hot spots in the world are in India. LinkedIn mined information in over 300 million member profiles to identify cities across the globe that attract significant proportions of tech talent.
For the 53 cities they analyzed, the median percentage of new residents with tech skills was 16 percent. Several Indian cities were more than double the median percentage.
Bangalore, India claims top spot with 44 percent of new residents with technology skills. Pune, India (43 percent) and Hyderabad, India (43 percent) tied for second place. The rest of the top 10, in descending order, are: Chennai, India; San Francisco Bay Area; Seattle; Austin; Melbourne, Australia; Sydney, Australia; and, Gurgaon, India.
Look for India in our Countries section sometime during the first quarter of 2015.