Bengaluru, Mumbai in race to catch up with world’s tech hubs

New analysis released by the Mayor of London’s investment agency reveals Bengaluru as the world’s fastest-growing technology destination, with India’s financial centre of Mumbai also in the global top 10.

Bengaluru, often dubbed as the Silicon Valley of India, has firmly cemented its tech credentials as it emerged as the world’s fastest-growing mature tech ecosystem in the world since 2016. New research based on data by Dealroom.co data and analysis by London & Partners – the Mayor of London’s international trade and investment agency – found the UK capital coming in at second place to Bengaluru. The second Indian city also in a catch-up race was Mumbai, which made it into the top 10 fast-growing ranking at sixth place.

While Bengaluru, the capital city of the southern Indian state of Karnataka, grew 5.4 times from $1.3 billion in 2016 to $7.2 billion in 2020, the Maharashtra capital of Mumbai grew 1.7 times from $0.7 billion to $1.2 billion in the same period. London, in comparison, registered a robust three times growth between 2016 and 2020, rising from $3.5 billion to $10.5 billion.

Hemin Bharucha, Chief Representative of India at London & Partners, said: “It’s fantastic to see that Bengaluru and London ranked as the top two fastest growing global tech hubs for VC investment. Our two great cities share mutual strengths in entrepreneurship and innovation – creating lots of opportunities for tech investors and companies to do business across both regions.

“London has a strong trade and investment relationship with cities across India and today’s figures show the opportunities for future partnerships between UK and India on technology. Despite the pandemic, tech companies in London and India are continuing to lead the way in creating game changing technologies – especially in high growth sectors such as EdTech and Fintech.”

Investment hubs

Bengaluru is also ranked sixth for the world’s tech venture capitalist (VC) investments, on a global list topped by Beijing and San Francisco, New York, Shanghai and London making up the top five. Mumbai comes in at No. 21 in the worldwide ranking, with Boston and Singapore among the other high-ranking cities.

Skillmine, a Bengaluru-headquartered tech company offering new generation IT consulting and managed services which expanded to London last year, highlighted access to “like-minded tech entrepreneurs alongside a deep tech talent pool” as the highlight of what has been referred to as India’s Silicon Valley in the past.

Anant Agarwal, Managing Director, Skillmine, said: “It has been exciting to be part of Bengaluru’s emergence as a world-class tech hub. From here we expanded our business operations into London in May last year, as well as into the Middle East and America markets. London is a global tech hub with access to a thriving tech talent pool alongside growth capital and a wide customer base. We are excited to grow our business in the city.”

Tech capital

Behind Bengaluru and London, the other fast growing tech hubs include the two German cities of Munich and Berlin and the French capital of Paris, all three more than doubling their investments in the 2016-2020 period. The UK capital, however, cemented its status as Europe’s leading tech hub – with London companies receiving over three times the amount of investment than any other European tech city.

London Mayor Sadiq Khan said: “London is the global tech capital of Europe. Despite the challenges brought about by Brexit and the coronavirus pandemic, London’s tech sector continued to thrive in 2020 and has an important role to play in the city’s economic recovery.

“London is already home to some of the world’s best technology companies and will remain open to international investment and tech talent from all over the world.”

Pandemic proof

Despite the global pandemic and the UK’s exit from the EU, London tech firms raised $10.5 billion in 2020 – significantly more than the total amount raised in 2017 ($7 billion) and 2018 ($5.9 billion) and close to the record in 2019 ($10.7 billion).

“It’s brilliant to see how resilient London’s tech sector has been, despite all the challenges of 2020. International investors have shown real confidence in London, with new venture capital funds setting up here to invest in high-growth companies in sectors like fintech, cybersecurity and health tech. This is because London continues to be the gateway to the European market and a fantastic place to set up and scale a tech company,” said Laura Citron, CEO of London & Partners.

The new research from Dealroom.co and L&P also reveals that mega funding rounds for London-based tech companies increased VC investment levels for UK tech in 2020, with British tech firms raising a record $15 billion in 2020. Additional findings show that London is now home to 1,252 VC firms – more than any other European city.