Beyond the Metros: Why Indore and Central India Are the New Frontier for Startups

What’s Happening: The Data-Backed Rise of the Heartland

The surge of Tier-2 cities is not based on anecdotes but on hard data. By early 2025, it’s estimated that over 50% of India’s DPIIT-recognized startups operate outside Tier-1 cities, a testament to a democratizing entrepreneurial landscape. This migration is fueled by a powerful combination of factors. Operationally, startups in cities like Indore and Jaipur benefit from costs that are 30-40% lower than in Bengaluru or Delhi, covering everything from real estate to salaries. This extended runway allows founders to focus on sustainable growth rather than just survival.

Funding, while still metro-centric, is beginning to follow the talent. Projections for the 2024-25 period suggest that Tier-2 city startups have raised over $2.5 billion, a significant 25% increase from the previous year. Indore alone was projected to attract over $250 million in funding, with a focus on Deep-tech and Agritech. This financial confidence is bolstered by strong government action. The Madhya Pradesh Startup Policy, for instance, provides a robust support system, including a ₹100 crore Startup Capital Fund and financial assistance of up to 18% on investments for women and SC/ST entrepreneurs. This creates a fertile ground for innovation to take root and flourish.

Why It Matters: A Paradigm Shift for Founders, Investors, and Mentors

This geographic diversification of the startup ecosystem has profound implications. For founders, it means a lower barrier to entry. The ability to build a lean, focused team with higher employee loyalty and lower attrition is a game-changer. The talent pool is richer than ever, thanks to a post-pandemic reverse migration of skilled professionals who now prefer to work from their hometowns. Institutions like IIM Indore and IIT Indore are creating a steady stream of high-quality talent that is eager to contribute to the local ecosystem.

For investors, Tier-2 cities represent an unsaturated market with massive growth potential. Valuations are more realistic, and startups are often addressing tangible, grassroots problems in sectors like AgriTech, SaaS, FinTech, and hyperlocal services. The success of Bhopal-based companies like Appointy and WE360.AI, or Indore’s ShopKirana, demonstrates that global-scale businesses can be built from Central India. For mentors, including those at TIE Indore, this shift presents a vital opportunity to guide a new generation of entrepreneurs who are deeply connected to their local markets but have global ambitions. The challenges they face—from navigating local regulations to scaling beyond their home state—are unique and require nuanced mentorship, a core pillar of TiE’s mission.

How Startups Can Respond: An Actionable Framework for Central India

For entrepreneurs in Madhya Pradesh, this is a moment of unprecedented opportunity. Here’s how to leverage the trend:

1. Build for Bharat, Scale for the World: Start by solving a local problem you understand deeply. The next 500 million internet users are in Tier-2 and Tier-3 India. Create solutions tailored to their language, user experience, and needs. Once you achieve product-market fit here, the model is often scalable globally.
2. Leverage Government Support: The MP Startup Policy is more than a document; it’s a toolkit. Avail incentives like lease rental assistance, patent filing support, and investment top-ups. Engage with bodies like MPSEDC to understand the support available at IT parks like Crystal IT Park and Electronics Complex in Indore.
3. Tap into the Local Ecosystem: Don’t build in a silo. Connect with incubators at IIM Indore and IIT Indore. Participate in events like TIE Con MP to network with mentors, investors, and fellow founders. Join TIE Indore’s programs like TIE Nurture and TIE University to get structured mentorship. These networks are crucial for overcoming the initial hurdles of funding and market access.
4. Focus on Capital Efficiency: Your biggest advantage is a lower burn rate. Emphasize profitability and sustainable growth. Bootstrapped success stories like Bhopal’s Appointy prove that you don’t need massive venture capital from day one to build a successful global SaaS company.

The Local Lens: Success Stories from Indore and Bhopal

Central India is already producing remarkable startups that validate this trend. In Bhopal, Appointy, a bootstrapped online scheduling software, serves a global clientele from its 4-acre campus. WE360.AI, an employee productivity monitoring software, raised its seed round and is scaling rapidly. These companies leverage local talent and lower costs to compete on a global stage.

Indore, a commercial powerhouse, is home to ShopKirana, an AgriTech platform empowering retailers, and Gramophone, a full-stack ag-tech solution for farmers. The city’s ecosystem is further enriched by SaaS players like OneHash and MSG91. These startups are not just creating jobs; they are building a micro-ecosystem of talent, innovation, and mentorship. The presence of premier institutions like Symbiosis University of Applied Sciences in Indore and the proactive development of infrastructure like the Indore Super Corridor are creating a flywheel effect, attracting more talent and investment to the region.