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50% of Indian Startups Now From Tier 2-3 Cities; Women Drive Inclusive Growth

India's startup ecosystem has surpassed 2 lakh recognized startups, with half now emerging from Tier 2 and Tier 3 cities, signaling a democratization of entrepreneurship. Women-led startups are a key driver, with over 45% of startups having at least one woman director, promoting inclusive and regionally balanced growth. The high-value segment has exploded from 4 unicorns in 2014 to over 120 today, with a combined valuation exceeding $350 billion. Cornerstone initiatives like the Fund of Funds for Startups, with a Rs 10,000 crore corpus, have invested in over 1,370 startups to strengthen the domestic risk capital landscape.

Key Points: India's Startup Boom: 50% from Tier 2-3 Cities, Women Lead

  • 50% startups from Tier 2-3 cities
  • Over 45% have at least one woman director
  • Ecosystem valued over $350 billion
  • Fund of Funds committed Rs 10,000 crore
2 min read

50 pc of Indian startups emerging from Tier 2, 3 cities; women lead inclusive growth

Over 2 lakh Indian startups, with 50% emerging from Tier 2 & 3 cities. 45% have women directors, driving inclusive growth and a $350B+ ecosystem.

50 pc of Indian startups emerging from Tier 2, 3 cities; women lead inclusive growth
"This reflects the emergence of innovation not only as an economic engine but also as a driver of social equity - Official Statement"

New Delhi, Jan 15

Startups are increasingly bridging India's rural-urban divide by deploying solutions across agri-tech, telemedicine, microfinance, tourism, and ed-tech, directly addressing developmental gaps and supporting rural livelihoods, an official statement said on Thursday, ahead of the National Startup Day.

Notably, women-led startups are emerging as a key driver of inclusive and regionally balanced growth, with more than 45 per cent of recognised startups having at least one-woman director/partner as of December 2025.

"This reflects the emergence of innovation not only as an economic engine but also as a driver of social equity and balanced regional development," according to the official statement.

Over the past decade, India has rapidly evolved into one of the world's largest startup ecosystems, with more than 2 lakh startups as of December 2025.

Major hubs like Bengaluru, Hyderabad, Mumbai, and Delhi-NCR have been at the forefront of this transformation.

At the same time, smaller cities are also steadily contributing to the momentum, with around 50 per cent of the startups emerging from tier 2 and 3 cities, reflecting the democratisation of entrepreneurship.

The Startup India Initiative, led by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry, has emerged as the cornerstone of India's innovation and entrepreneurial ecosystem.

"This progress is reflected in India's high-value startup ecosystem, which has expanded from just four privately held companies valued above $1 billion in 2014 to over 120 such firms today, with a combined valuation exceeding $350 billion, underscoring both the scale and growing global relevance of India's startup landscape," said the statement.

Moreover, the Fund of Funds for Startups (FFS) is a flagship initiative of the DPIIT under the Startup India Action Plan and is managed by the Small Industries Development Bank of India (SIDBI).

With a corpus of Rs 10,000 crore, the scheme supports SEBI-registered Alternative Investment Funds (AIFs), which in turn invest in startups, with the objective of expanding access to domestic risk capital and strengthening the entrepreneurial ecosystem.

"The corpus of Rs 10,000 crore has been committed to over 140 AIFs, which have collectively invested over Rs 25,500 crore in more than 1,370 startups," said the statement.

- IANS

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Reader Comments

R
Rohit P
While the numbers look impressive, I hope the support reaches the actual grassroots entrepreneurs and isn't just concentrated among a few connected players in smaller cities. The real test is sustainable job creation in these regions.
A
Aditya G
From 4 unicorns to over 120... that's a staggering growth story. The ₹10,000 crore fund is a massive push. If this momentum continues, we can truly become a global innovation powerhouse. The focus on agri-tech and ed-tech for rural areas is the need of the hour.
S
Sarah B
As someone working in venture capital, this data is very promising. The democratization of capital through the FFS scheme is crucial. A diverse founder base from smaller cities and women leaders brings unique perspectives that solve real Indian problems.
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Meera T
More than 45% of startups having a woman director is a statistic we should all be proud of! It shows a shift in mindset. My cousin in Indore started a telemedicine platform, and it's stories like hers that make this data real. Power to all the women entrepreneurs out there! 💪
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Karthik V
This is good, but the challenge remains in scaling these startups from smaller cities. They need access to the same quality of mentorship, talent, and later-stage funding as the ones in Bengaluru or Delhi. Hope the ecosystem support evolves to address that gap.

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