For the longest time, India’s startup buzz was confined to Bengaluru’s tech parks, Gurugram’s glass towers, or Mumbai’s business lanes. But quietly and steadily, a new chapter is being written far away from these metros—in the heartlands of India, in cities where tradition still meets ambition at a chai tapri. From Coimbatore to Indore, Surat to Bhubaneswar, Indian startups are no longer chasing just the Tier-1 dream. They’re finding gold in Tier-2 and Tier-3 towns—and rewriting the rules of business as they go.
Roots Over Skylines: Why The Shift?
It started with a simple question—why spend crores on office rent in Bengaluru when you can build a world-class product from Tirunelveli at one-tenth the cost? The pandemic was a boon in disguise. The moment remote work came into practice, founders who once migrated to metros began returning to their hometowns. With them came startup ideas, funding connections, and a burning desire to prove that great companies don’t need a pin code in Koramangala to succeed.
Zoho: The Flagbearer from Tenkasi
When Sridhar Vembu, the founder of Zoho, moved base from California to Tenkasi—a quiet village in Tamil Nadu—it didn’t just raise eyebrows. It inspired a movement. Zoho’s engineering offices in Tenkasi are proof that talent exists everywhere, not just in urban centres. Vembu believes in hiring local youth, training them, and nurturing talent where it grows best—at home. Today, Zoho is a global tech name but its soul lies in rural India.
Minimalist: Simplicity Born in Indore
Minimalist, the skincare startup that’s taken over Instagram feeds and bathroom shelves, didn’t come from a Mumbai PR firm or a Delhi marketing agency. It was born in Indore. What set it apart? Its science-backed, no-nonsense approach to skincare—and the fact that it was unapologetically rooted in a Tier-2 city. Their local manufacturing, efficient logistics, and content-first strategy proved you don’t need to be in a capital city to become a category leader.
| Metric | Tier-1 Cities | Tier-2 Cities | Tier-3 Cities |
| % of New Startups (2023) | 55% | 32% | 13% |
| Cost of Setting Up (avg.) | ₹5–7 Cr | ₹2–3 Cr | ₹1–1.5 Cr |
| Office Rental (per sq ft/month) | ₹100–150 | ₹40–70 | ₹20–40 |
| Internet Penetration Growth (YoY) | 6% | 11% | 15% |
| Job Creation in Non-Metros (2022–23) | — | +24% | +31% |
Also read: This Indian EV Bike Startup Is the First to Enter in 10 European Nations!
Homegrown and Hungry: The Rise of Local Founders
Tier-2 and 3 cities are no longer just markets—they’re breeding grounds for entrepreneurs. With lower operational costs, rising internet penetration, a digital-savvy young population, and aspirational energy, cities like Jaipur, Lucknow, Bhopal, and Vijayawada are brimming with potential. Founders here are building solutions for real India—fintech tools for vernacular users, D2C brands that understand regional tastes, edtech platforms tailored for semi-urban students.
Take DealShare for example. It cracked the code of group-buying for middle-income households in non-metro cities. Or CityMall, which uses community leaders in Tier-3 towns to drive commerce through WhatsApp. These aren’t just startups—they’re cultural translators.
Real Estate Is Taking Notice Too
As talent and companies move away from the metros, real estate trends are beginning to mirror the shift. Office spaces, co-working hubs, and tech parks are emerging in places that were once seen as ‘off the map’. Cities like Mysuru, Surat, and Kochi are witnessing a quiet commercial boom. Residential real estate, too, is seeing a tilt. As people realise they can work for a global company from their hometown, the demand for quality homes in smaller cities is climbing.
The Road Ahead: Not Just Metro First, But Bharat-First
India is not just a land of cities—it’s a country of towns, villages, and aspirations tucked away in every corner. Startups that can tap into this silent majority are the ones rewriting the future. They’re proving that with internet access and intent, a boy from Bilaspur can build the next unicorn, and a girl from Jorhat can code the next big app. This is not just decentralisation—it’s a shift in power. As metros reach saturation, the next wave of growth, ideas, and impact is clearly coming from India’s Tier-2 and 3 towns. And if the Zoho and Minimalist stories are any indication, the heart of India isn’t just beating—it’s booming.
Written by Roshni Mohinani
