Published By: Sayan Paul

Karnataka Recognized As 5th Largest Unicorn Hub: Key Sectors Fueling The State's Growth

Over the years, Karnataka has emerged as a powerhouse of innovation and entrepreneurship.

"India is home to nearly 112 unicorns, valued at approximately $320 billion, with Karnataka housing 45 of these, valued at around $160.8 billion." - Priyank Kharge (Karnataka’s Minister for Electronics, IT & BT)

Karnataka is referred to as a “startup powerhouse,” and is playing a significant role in India's overall growth. Thanks to its robust infrastructure and innovation ecosystems, along with various measures taken by the government, the South Indian state has reached unprecedented heights in its start-up culture over the years. And the best thing is it's not confined within the capital city - all thanks to the government's initiative, "Beyond Bangalore".

According to a report by Business Today, Karnataka has been recognized as the fifth-largest unicorn hub worldwide; behind the San Francisco Bay Area, New York, Beijing, and London. Priyank Kharge, Karnataka’s Minister for Electronics, IT & BT, said in a statement that the state is home to 45 of India's total 112 unicorns, and 38% of India’s 435 soon-to-be unicorns. He added that the ecosystem here has "1,565 venture capital and corporate venture funds, 17,164 angel investors, over 400 R&D centers, and more than 100 chip design houses".

 

(Credit: Business Today)

What lies ahead here seems immensely promising. In its goal of achieving a trillion-dollar economy, the state is developing "centers of excellence" across sectors and is focusing on various new domains as well. In this article, let's have a look at the major sectors that helped it achieve the feat.

IT

Of course, the foundation of Karnataka being a unicorn hub is its IT sector. According to the 2024 Global Startup Ecosystem Report by Startup Genome, Bengaluru is "home to over 80% of India's global IT offices, with the city's software exports valued at INR 6.3 lakh crores". There's a highly skilled IT workforce, with many engineers, researchers, and scientists working here. Thanks to the government's various measures, the state has a thriving start-up environment in the IT sector, giving birth to unicorns like Zerodha, PhonePe, Flipkart, and more.

 

(Credit: Priyank Kharge)

With time, IT here is expanding its presence in other sectors as well, including finance, healthcare, and education among others.

Logistics

Thanks to its strategic location, Karnataka is an important hub for international trade. As a result, the state offers a good environment for logistics start-ups to grow. And with technological advancements in recent years, several of these start-ups have flourished and become unicorns.

 

(Credit: Indian Tech & Infra)

For example, BlackBuck, a leading player in India's logistics landscape, achieved unicorn status in 2021 and went on to contribute significantly to Karnataka's supply chain. Ecom Express, another logistics unicorn, has set up hundreds of stores in Bengaluru, serving millions of the city's residents. The list also includes Porter which is valued at an estimated $1 billion.

Artificial Intelligence & Machine Learning

Artificial intelligence and machine learning have recently gained enormous attention - and Karnataka has literally become a hub for these. Thanks to the state's already established tech-driven culture, there are many AI engineers and data scientists making significant progress in the AI and ML sectors. Numerous startups have emerged in these fields, several of which have achieved unicorn status. SigTuple is a prime example which is a medtech startup specialising in digital microscopy solutions powered by artificial intelligence.

Notably, the Karnataka government is now focusing on developing an inclusive AI and ML industry, in partnership with the World Economic Forum. Moreover, the government is using various AI/Machine Learning-based software to strengthen the administrative system.

 

(Credit: Priyank Kharge)

Speaking at a recent event, Kharge said he wants to position Karnataka not only as an investment destination but also as a space for knowledge and skills. And he mentioned that the state will fly even higher in coming years, breaking into the top three spots worldwide as unicorn hubs.

Besides the above-mentioned sectors, some others fueling the growth include agritech, gaming, and defense.