Survey reveals smaller centres’ wholesome urge for food for funding in start-ups

About 44 per cent of buyers in a survey stated they’ve actively supported start-ups in Tier-2 and three cities, indicating a eager curiosity within the untapped potential of rising markets, in line with a report by Primus Companions titled ‘Small Cities, Large Concepts: The Rise of Innovation and Entrepreneurship in India’s Tier-2 and Tier-3 Cities’.

The report notes that throughout the investor phase, 64 per cent had directed their investments in direction of technology-based start-ups, signalling an urge for food for tech-driven innovation.

This strong curiosity within the tech sector suggests a recognition of its transformative potential and talent to drive financial progress. Additional, 23 per cent of buyers supported non-tech start-ups, showcasing a diversified funding portfolio extending past the realm of know-how. 13 per cent of buyers have particularly backed start-ups with a social affect focus, emphasising a dedication to ventures that tackle urgent societal challenges.

Charu Malhotra, Co-Founder & Managing Director at Primus Companions, stated, “The expansion of Tier-II cities signifies a broader financial and infrastructural transformation. Regardless of grappling with points reminiscent of infrastructure gaps, funding constraints, and expertise scarcity, the resilience of those start-ups factors to availability of expert expertise, cost-effective operations, and beneficial authorities insurance policies which have contributed to their progress.”

An extra 24 per cent of the surveyed buyers have benefited from networking help, underscoring the importance of connections in navigating the complicated panorama of investments. Moreover, 41 per cent of buyers are affiliated with Different Funding Funds (AIF) or Fund of Funds (FoF) syndicates, highlighting the collaborative nature of their involvement in financing start-ups.

Nineteen per cent of buyers stated they had been having fun with tax advantages because of their investments, showcasing beneficial fiscal incentives that contribute to the attractiveness of investing in start-ups. Past monetary benefits, the remaining buyers have skilled further perks, together with improved visibility, enhancing the multifaceted advantages that buyers accrue of their engagement with start-ups in Tier-2 and Tier-3 cities, the report stated.