ANGEL NETWORKS WHO ARE TARGETING STARTUPS IN SMALLER CITIES

In order to raise capital and foster their growth, startups in Tier 2, 3, and 4 cities are increasingly turning to their local network of investors. For this article, we spoke with angel networks that are either based locally or that identify and assess prospective investment opportunities in small geographic areas.

- SUJATA SANGWAN

The era in which entrepreneurship and startups were only restricted to metro cities has long since passed. In India today, Tier 2 and Tier 3 cities are home to almost 50% of the recognised startups, as per data from the Union Ministry of Commerce and Industry. The ongoing technological revolution taking place in Tier 2 and Tier 3 cities is accelerating economic development in the nation and bringing about socioeconomic change on a worldwide scale. According to a spokesperson from Chandigarh Angels Network (CAN), startups in smaller cities generally benefit from lower operating costs than those in Tier 1 cities. “Office space, hiring new employees, and living expenses are often less expensive, which might be beneficial, particularly during the financial winter. Since they can operate more cheaply, entrepreneurs may extend their runway and concentrate on sustainable growth,” the spokesperson stated. However, the startups in smaller cities are finding it relatively more challenging to secure funding compared to those located in major startup hubs. “Nevertheless, despite the funding winter, there are still opportunities available, and investors are recognising the potential of startups in smaller cities,” the spokesperson added. The funding winter applies more to Series A and upwards startups, according to Prabhash Nirbhay, Founder and Chief Evangelist at Jharkhand Angels; angel networks are less impacted because they are still in the very early stages. “However, startups in general are looking at reaching profitability faster.” In order to raise capital and foster their growth, startups in Tier 2, 3, and 4 cities are increasingly turning to their local network of investors. For this article, we spoke with angel networks that are either based locally or that identify and assess prospective investment opportunities in small geographic areas.