If we mention startups, names like Bengaluru, Mumbai, or Delhi are usually what spring to mind. But change is in the air, and it’s from unknown directions-tier-2 and tier-3 towns in India. Previously overshadowed by metros, these smaller cities are quickly turning into vibrant startup hubs, filled with innovation, drive, and impact.
From Bhubaneswar to Bhopal, Surat to Siliguri, small cities are becoming startup hubs, defying conventional wisdom and redefining India’s entrepreneurial narrative.
The Data Doesn’t Lie: Startup Boom Beyond the Metros
Startup India reports that almost 50% of startups now have their origins from tier-2 and tier-3 cities. This is a huge turnaround from a few years back, when big metros dominated.
Some quick stats
More than 3,500 startups have originated from smaller cities in the last two years alone.
Jaipur, Kochi, Indore, and Guwahati are at the forefront.
Government programs such as Startup India Seed Fund, Atal Innovation Mission, and PMEGP have given young founders the confidence to start locally and go global.
Why the Shift? What’s Driving This Surge?
There are a number of reasons why this entrepreneurship wave is happening in small towns:
- Improved access to digital infrastructure
With the advent of Jio and low-cost smartphones, digital access has democratized opportunity. Small-town youth can now:
Take online courses (through platforms such as Coursera, Udemy)
Create websites or apps
Pitch to investors over Zoom
Sell products nationally through marketplaces such as Amazon, Flipkart, or Meesho
- Cost Advantage
It can cost 40–60% less to start a startup in a small town compared to a metro. This enables:
Lean startup models
Longer runways for bootstrapped ventures
Lower burn rates for early-stage capital
- Reverse Brain Drain
With and after COVID-19, professionals flocked to their hometowns. Numerous started local, bringing professionalism, network, and experience to small towns. - Incubation Ecosystem Support
Incubators such as iCreate (Ahmedabad), T-Hub (Hyderabad, for nearby towns), and your own Prottoyee platform are stepping up and helping in:
Mentoring first-time founders
Providing seed capital
Creating local startup culture
Inspiring Stories from Small-Town Startups
Let’s see examples of actual entrepreneurs who have done it from metro to million-dollar idea.
1. Agrowave (Haryana)
Founder: IIT Delhi alumnus
What they do: Leverage AI to automate supply chain for farmers
Impact: Linked thousands of rural farmers directly to markets with mobile pickup stations
Why it matters: Nurtured out of a Haryana town, addressing rural challenges with cutting-edge technology
2. ReshaMandi (Mysuru)
Sector: Agri-tech + Supply Chain
What they do: India’s first digital platform for silk farmers, weavers, and retailers
Growth: Grew fast from small-town Karnataka to pan-India
Funding: Raised more than $40 million
3. TruckSuvidha (Yamuna Nagar, Haryana)
Problem solved: Matching logistics demand with trucks in small towns
Why it stands out: Based out of a tier-3 city but established a national network of logistics players
4. Phool.co (Kanpur)
Idea: Upcycle temple flowers into incense and eco-products
Social Impact: Provides employment to rural women and a sustainable solution for temple waste
Investment: Supported by IIT Kanpur and Social Alpha
Challenges Faced by Small-Town Entrepreneurs
Although the growth is encouraging, small-town founder challenges remain:
Inadequate exposure to international trends
Accessing seed funding remains challenging
Brain drain to metros
Access to high-quality mentorship is limited
But this is where initiatives like Prottoyee come in-to bridge gaps, develop potential, and foster localized innovation ecosystems.
How Government & Institutions Are Supporting This Growth
Several initiatives by the Indian and state governments are targeting small-town innovators directly:
✅ Startup India Yatra
Taking incubation and startup exposure to tier-2/3 cities around India through bootcamps and pitch events.
✅ Atal Incubation Centres (AICs)
Installed in smaller education institutions to incubate grassroots innovation.
✅ PMEGP & MUDRA Loans
Fostering rural entrepreneurship and micro ventures through easy loan accessibility.
✅ State-specific programs
For instance:
Kerala Startup Mission
Maharashtra’s MahaStartup Yojana
Odisha Startup Policy
The Role of Local Ecosystems
Startups in small towns succeed when local ecosystems nurture them with:
Co-working spaces
Mentorship & advisory
Networking events
Investor access
That’s why incubators such as Prottoyee are not only useful-they are a necessity. They offer:
Custom support for first-generation entrepreneurs
Localized mentorship
Regional investor networks
The Road Ahead: What’s Next for Tier-2/3 Startups?
The pace is evident. The next Flipkart, Zomato, or BYJU’s may not be born in Bangalore or Delhi-it may happen in Raipur, Ranchi, or Rourkela.
We believe:
Entrepreneurship will be localized
Innovation will concentrate on problems of real India
Job generation will happen from these towns
And India’s real growth story will be penned from the ground level.