Compass, ever since it’s inception 3 and a half years ago, has been helping businesses across the world by providing corporations as well as entrepreneurs with reports on how their business compares up with others.
Armed with massive data from numerous sources , this time the company has generated another report, that deals with a list of start-up ecosystems.
The report, which was created with the help of data obtained through interviewing 200 entrepreneurs from 25 countries and surveying 11,000 startups, also includes inputs from highly respected data whizkids such as CrunchBase, Deloitte, and Dealroom.
The most interesting part, in context of India’s startup ecosystem was the entry of Bangalore among the Top 15 startup ecosystems in India. While this is 4 place jump as compared to previous year, Bangalore still lags way behind other ecosystems like London, Berlin, Tel Aviv, Paris etc., largely due to the lack of infrastructure on the Govt. end
Surprisingly, while Bangalore stood at a decent 6th when it comes to funding, India’s Silicon Valley slumped to 17th and 20th ranks when it comes to Market Reach and Talent respectively.
While the report was quite extensive and covered a variety of topics, it specially laid stress on several key findings. For one, the businesses as we know them have changed and from being in-house, domestic affairs gone on to become international concerns — thanks to the more inclusive systems — with investors pitching in regardless of the region. The study in fact showed that, out of the 20 ecosystems studied, 37 percent of all funding rounds had at least one investors from other regions.
Similarly, the number of foreign employees working in startups within the top 20 ecosystems stood at an impressive 29 percent, with silicon valley topping the charts with 45 percent average foreign workforce.
Also, second offices are becoming increasingly common with businesses moving to havens such as Singapore. Compass CEO Bjoern Herrmann, speaking on the topic, said
Many companies that start in Kuala Lumpur or Jakarta move over because the [investor] money is there, it’s easy to open bank accounts, and you have a good regulatory framework, among other things.
Another factor was the increasing presence of Venture Capitalists across the scenario and according to the report, VC funds rose 95 percent between 2013 and 2014.
Berlin topped the charts for being one of the most attractive VC destination with a staggering 12x growth between 2013-2014, followed by Bangalore (4x), Boston (3.7x), Amsterdam(2x) and Seattle(also 2x).
Exit values are also increasing as according to the report, between 2012 and 14, the values reached 78 percent annually, with M&A exits accounted responsible for 60 percent of these with the other 40, thanks to IPOs.
Interestingly, while the silicon valley is certainly growing at an impressive pace of 47 percent, other ecosystems are growing even faster with Berlin recording growth by a factor of 20. Bangalore and London were also far ahead, with growth factors of 5 and 4 respectively.
However, that does not mean that Silicon valley is losing it’s magic, far from it. In fact, taking various other factors into account, the valley topped the list of the best and the most dominant start-up ecosystem, followed by New York, L.A., Boston, Tel Aviv, London, Chicago, Seattle, Berlin, Singapore, Paris, Sao Paulo, Moscow, Austin, Bangalore, Sydney, Toronto, Vancouver, Amsterdam, and Montreal.
Analysts expect the growth rate to change over the coming time, which means a possible spike in exit values for the Silicon Valley in the near future.
The full report by Compass meanwhile, can be viewed right here.