Mumbai’s fintech dream off to a solid start(up)

The question of which Indian metropolis is the best for infrastructure food safety and more has been a longrunning debate Last week when Prime Minister Narendra Modi shared his vision for making Mumbai the global fintech capital it stirred the discussion anew among startups and entrepreneurs with many drawing a direct comparison between the countryrsquos financial capital and IT hub BengaluruFuelling the debate further on July 17 the Karnataka government tabled a controversial job reservation bill which mandates that 50 per cent of management positions and 70 per cent of other roles in private companies be reserved for locals With the PMrsquos push for Mumbai and dissent among tech CEOs over Karnatakarsquos new bill an interesting question arisesmdashis it this cityrsquos time to shine as the goto hub for fintech and startupsTherersquos no denying that Mumbai has some catching up to do According to a report by startup analysis platform Inc42 over 60 per cent of all startup funding in India goes to firms in Bengaluru In 2023 Bengalurursquos startups received a total funding of 42 billion Rs 420 crore whereas Mumbai received 15 billion R150 croreKahraman Yigit CEO and cofounder of Olive Living says the cost of office space and overall living expenses are both higher in MumbaiIn February Unacademy cofounder and CEO Gaurav Munjal had said in a post on X ldquoMumbai and Delhi cannot become tech hubs how much ever people tryhellipBangalore is the place to be if yoursquore starting up Donrsquot even think about any other placerdquoNot all agree with this argument thoughAnurag Pandey cofounder of the Mumbaibased fintech company Nimbbl says ldquoI think Mumbai is far better in terms of the work culture than other cities While Mumbai may not be the leader in tech startups nationally it is the frontrunner in many industries such as banking finance retail media and entertainmentrdquoMentioning successful startups based out of Mumbai such as Dream11 Nykaa and bookmyshow he says ldquoThe city has nothing lacking to become a global fintech ecosystem leader It has all the large banks insurance companies wealth and investment funds and their respective regulators The tech talent in the region MMR amp Pune has also grown significantly in the last 10 yearsrdquoAs for the ease of networking in the city he says that just like Bengaluru Mumbai too has WhatsApp communities to promote the exchange of ideas and kick off collaborations ldquoOne of the many startup cliques in the city is the Mumbai Fintech WhatsApp group which facilitates essential networking and mutually beneficial relationshipsrdquo he saysSamriddhi Pandey founder and CEO of Mumbaibased startup Defy AerospaceStartups donrsquot have a fully developed business model and more crucially they lack adequate capital Hence the role of the community around such ventures is crucial to take the business to the next phase Kahraman Yigit CEO and cofounder of Olive Living a coliving startup based out of Bengaluru highlights how the startup ecosystem in Karnatakarsquos capital has thrived primarily due to its roots in the tech industry ldquoMumbai is a finance films and mediaheavy cityrdquo he says adding ldquoThe work culture in the two cities varies Bengaluru with its global RampD centres and MNCs is a natural extension for AI and tech startups It fosters synergy among such venturesrdquoMany point out that higher office rental rates and cost of living are another strike against Mumbai Real estate agency owner Vishal Wadhwani who specialises in international real estate says ldquoRental rates in Mumbai range from Rs 300500 per sq ft In Bengaluru itrsquos Rs 75100 per sq ft And in Hyderabad itrsquos R50 per sq ft The numbers speak for themselves thatrsquos why there are fewer startups in MumbairdquoAbhishant Pant the founder of Mumbaibased The Fintech MeetupmdashIndiarsquos largest fintech ecosystem with over 1000 founders over 30 banking financial services and insurance institutions and over 50 venture capitalistsmdashagrees with WadhwaniAbhishant Pant right Aishvary Singh vicepresident at Square YardsOffice space for each employee costs up to Rs 20000 in Mumbai says Pant On the other hand he adds in Bengaluru office spaces in Indiranagar and Koramangala cost Rs 8000 to Rs 10000 per seat ldquoFrom Fort to Andheri the cost per seat is between Rs 18000 and Rs 20000 making it R1 lakh per month for five people In contrast in Pune you can accommodate 25 people for R115 lakh per monthrdquo he explainsWith a dearth of inhouse tech talent an essential component for fintech manpower has to be relocated from other cities which increases costs adds Pant He emphasises that new engineering talent is not drawn to Mumbai as the starting salaries do not match the cost of living hereInstead Pant backs Pune as a reasonable alternative He gives the example of credit card company OneCard a unicorn that was originally founded in Mumbai but later moved to Pune which boasts a large tech talent pool in areas like Hinjewadi Kharadi and Magarpatta ldquoOver the last four to five years Pune has emerged as a startup city attracting those who are not convinced by Mumbai due to its high costsrdquo he addsAishvary Singh vicepresident at Square Yards says Bengaluru is decades ahead in terms of tech investment and affordability is a major plus too ldquoThe cost of failing in Bengaluru is much less than the cost of failing in Mumbai Startups need time to figure out which models may work for them The city Bengaluru is generous in terms of allowing multiple attempts to startups which makes it uniquerdquoSamriddhi Pandey founder and CEO of Jogeshwaribased drone company Defy Aerospace argues that Mumbairsquos ecosystem has a lot to offer ldquoThe advantage of being in Mumbai is that a lot of investors are based here Also a lot of universities for research and training partnerships are at hand here toordquoldquoFor a hardwarebased company like mine engineers prefer Mumbai more than any other cityrdquo she addsAs for ease of doing business Samriddhi feels itrsquos a cakewalk in Maharashtra ldquoFrom state taxes to company registrations and even regulatory norms the Maharashtra government is very supportive I know of people in Bengaluru who complain of these processes not being as smoothrdquo she saysThe aeronautical engineer feels Mumbairsquos work culture is a mix of the professionalism of Dubai and the relaxed vibe of GoaWhat steps can Mumbai take to attract more startups Turns out the Maharashtra government already had the right idea back in 2018 when it launched the Mumbai Fintech Hub The scheme had offered reimbursements of R10 lakh annually to startups in 2019 and 2020 However the programme faltered following a change in governmentPant who was a part of the initiative believes that the only way to make Mumbai a fintech hub is to revive it and attract the right tech talent ldquoCurrently 90 per cent of venture capitalists have moved to Bengaluru from Mumbai The government needs to revisit its strategy to foster a thriving fintech ecosystem in Mumbairdquo he explainsHowever a top Maharashtra government official says that the focus should not only be on Mumbai but each city in Maharashtra ldquoMaharashtra leads the country for number of registered startups The focus should be not on just Mumbai but the other smaller cities and towns too Each city has its unique ecosystem when it comes to startupsrdquo he told usThe official also noted that a majority of the startups based out of Mumbai are mostly profitable unlike in BengaluruRs 150crTotal funding for Mumbai startups in 2023Rs 420crTotal funding for Bengaluru startups in 2023