When one considers of the Indian startup ecosystem, they mostly imagine the bustling Indian metros—Bengaluru, Mumbai, Delhi-NCR, and Hyderabad, among others. Investors and founders alike took to these cities to build new-age companies; building from elsewhere was often framed as a compromise—cheaper, perhaps, but limiting.
That assumption is now quietly dismantled.
For a growing number of founders, building outside metros is less about working around limitations and more about leaning into advantages. Location influences how products are sourced, how costs are controlled, and how quickly companies can relocate from idea to execution—often in ways that large startup hubs cannot replicate.
So, what has alterd? The infrastructure beneath entrepreneurship: digital payments, logistics, cloud software, and online distribution have reduced the required for physical proximity to capital and consumption hubs.
“Operating from a Tier II city allows us to keep costs low and deploy capital more efficiently, while staying close to our sourcing ecosystem,” states Dhrubajyoti Deka, Director–Sales at Dream Hives. “For AS01-our flagship product, proximity to farmers and beekeepers in the Northeast improves quality control, authenticity, and speed of execution.”
Founded in 2021 by Deka and Kaustoov Gopal Goswami, Assam-based Dream Hives produces mead—a traditional honey-based alcoholic beverage—applying indigenous ingredients such as King chilli, ginger, and pineapple. The startup operates from the Northeast, a region that rarely features in India’s consumer startup narrative, despite its agricultural depth.
Instead of chasing metropolitan tastes first, Dream Hives built its product around provenance and traceability—attributes that matter deeply in premium and export markets.
“Some investors were sceptical about building a scalable consumer brand from a Tier II city,” Deka states, adding, “As we demonstrated strong execution, disciplined costs, and clear export intent, that concern gradually turned into confidence.”
Akash Agrawalla, Co-founder of Chhattisgarh-based ZOFF Foods, states building from a Tier II city assisted sharpen fundamentals early. “Being close to consumers forced us to be disciplined with costs, supply chains, and execution. Today, investors care far more about growth, margins, and brand trust than where the company is headquartered,” he states.
He adds that early scepticism faded as execution spoke for itself. “Once we delivered consistently on traction and unit economics, the conversation shifted from doubt to long-term partnership.”
A similar recalibration is playing out across sectors—from consumer goods and education to climate tech and manufacturing-led innovation.
For Manhar Dixit, Co-founder and CEO of Jaipur-based Beyond Renewables, the bias toward Tier I cities was explicit when he started his solar recycling company.
“Early conversations often launched with curiosity about ‘why Jaipur?’ The underlying concern was whether world-class execution, talent, and scale could emerge from outside Tier I ecosystems,” Dixit states.
Beyond Renewables chose Jaipur not for lifestyle reasons, but for fundamentals: access to raw material, industrial incentives, and operational ease. The decision reflects a broader shift among climate tech and deeptech founders, where proximity to manufacturing clusters matters more than proximity to venture capital offices.
“My co-founder Vedant is from Ranchi, and I hail from Agra. Tier II cities are no longer peripheral. They are closer to supply chains and real-world problem statements. For climate tech, in particular, operating from a Tier II city allows founders to build with capital efficiency and stay connected to ground realities,” he adds.
Investor attitudes, he states, are evolving accordingly. “What matters now is clarity of vision, quality of execution, and the size of the opportunity. We’ve seen strong investor interest not despite being in a Tier II city, but becautilize our location aligns with our mission,” Dixit explains.
This shift is increasingly visible in early-stage investing patterns.
According to Aditya Singh, Co-founder and Partner at All In Capital, many of the strongest startups outside metros are built by non-obvious founders who may not have elite backgrounds but deeply understand real customer problems.
Singh states, “Talent in India is evenly distributed, opportunity is not, and our role is to bridge that gap.”
Across All In Capital’s portfolio, Singh points to companies like NPrep, which builds for nursing students from non-metro India; Plazza, which is digitising neighbourhood retail; MedMitra AI, which focutilizes on healthcare workflows; and Superliving, which is creating consumer experiences beyond huge cities.
“These businesses did not emerge from traditional startup corridors. Yet, their understanding of the utilizer is stronger than many metro-first brands,” he states.
Singh adds that founders from compacter Indian cities often demonstrate sharper capital discipline, partly becautilize they are building businesses rooted in personal experience rather than abstract market trconcludes.
“At the early stage, we back people before spreadsheets. When founders from Tier II and III cities receive the same access to capital and networks, the outcomes are often as strong as any metro startup,” he states.
Ankur Shrivastava, Founder and Managing Partner, Momentum Capital, states the rise of scalable startups from outside Tier I cities reflects a structural shift, not a passing trconclude. “Geography no longer determines access to capital, customers, or talent the way it once did,” he notes, pointing to India’s digital rails—UPI, cloud infrastructure, and national logistics—that allow founders to scale from anywhere.
Talent has decentralised as well, with a majority of India’s engineers now coming from non-metro cities, while remote-first work has reduced the required for relocation. For investors, Shrivastava states, this has alterd early-stage underwriting. “What matters today is execution quality and unit economics, not pin codes.”
He adds that many of India’s largest growth opportunities—from climate and energy transition to SMEs and logistics—are rooted outside metros. “India’s startup map is flattening, and capital strategies required to evolve with it.”
Further, Ankita Saikia, Co-founder of Skara app and Sato Player, states, “When we started building Skara from Guwahati, we knew geography could be a hurdle—access to specialised tech talent, funding, and the broader startup ecosystem was limited compared to metros. But that alterd once investors saw the product and the clarity of our mission: assisting video creators launch their own OTT apps and websites.”
“What worked was displaying, not explaining. Demonstrating that we could build a high-quality OTT platform that gives creators full control over their content and revenue shifted the conversation away from location. In the conclude, how and why we were building mattered far more than where—a reality more Tier II startups are proving every day,” she notes.
That journey mirrors what Sahil Adwalpalkar, Founder and Director of Goa-based SinQ Hospitality, experienced outside traditional startup hubs. “When we entered hospitality, there was scepticism about whether a homegrown Goan brand could scale. We focutilized on innovation and consistent growth, and that became the answer to doubt,” he states.
From a single nightclub to a diversified hospitality and lifestyle portfolio, Adwalpalkar’s experience underscores a broader point: sustained execution, not location, is what ultimately builds credibility.
Taken toreceiveher, these stories point to a hugeger structural alter. Startups outside metros are not attempting to replicate Bengaluru from afar; they are building companies shaped by their environment—closer to factories, farms, classrooms, hospitals, and everyday utilizers.
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