For over a decade, India’s startup and AI narrative has revolved around a handful of metro cities. But that story is changing fast. Today, a growing share of India’s tech innovation is being built in tier-2, 3 cities. These emerging non-metro hubs offer deep talent pools, lower costs, and increasingly strong policy support.

From AI-driven SaaS and industrial automation to deep tech and GCC-led innovation, startups from these cities are no longer peripheral players. They are poised to fuel India’s next startup wave, reshaping the intersection of capital, talent, and ambition.

Across these cities, the rise of AI and tech startups is being driven by capital efficiency, distributed talent, policy support, and real-world problem-solving. Nearly 50% of India’s recognised startups now originate outside tier-1 metros, according to the Ministry of Commerce and Industry, marking a structural shift in how and where innovation is being built.

Pune

Pune has evolved into one of India’s most important emerging AI and software product hubs, often described as a “second HQ city” for startups that want proximity to Mumbai without the metro’s cost of living. Its strength comes from a dense concentration of engineering institutions, deep enterprise tech talent, and a long history of automotive and industrial R&D that is now converging with AI, robotics, and SaaS.

Pune-based startups attract consistent venture funding, especially in AI-led analytics, developer tools, and mobility tech. At the same time, global companies continue to expand R&D and GCC operations in the city, creating a strong flywheel of talent and spin-offs.

According to Tracxn data, Pune startups picked up a significant haul of $395 million in 2024. This year too, venture capital inflow has been strong, with gaming startup SuperGaming grabbing $15 million in a Series B round while digital lender LoanTap raised $6.2 million in June, taking its total funding to $26 million

Jaipur

Jaipur is widely regarded as among India’s most mature tier-2 startup ecosystems, driven by an evolving state startup policy focused on inclusivity, infrastructure, financial incentives, and quick clearances. Through initiatives like iStart Rajasthan, the state has registered over 7,100 startups across the state, with Jaipur being the major hub for SaaS, fintech, AI platforms, and consumer internet companies.

Notable companies include Celebal Technologies, offering enterprise AI and cloud services, which raised $15 million in Series B funding this year. Other active companies are MEDHINI by Arficus,** **GirnarSOFT, HabileLabs, Akeo, and Electro IT Solutions.

The state government also issued the Rajasthan Global Capability Centre Policy 2025 to foster innovation, enhance infrastructure, and create a skilled workforce.

Jaipur’s rise is also fueled by talent retention. Many engineers who once migrated to metros now choose to build or join startups locally, enabling AI-first companies to scale with lower burn rates and faster time-to-market.

Ahmedabad

Ahmedabad anchors Gujarat’s rapidly expanding tech ecosystem and is emerging as a serious hub for SaaS, deep tech, and industrial AI. The city benefits from a strong entrepreneurial culture, manufacturing-linked innovation, and proactive state support through Student Startup Innovation Policy and i-Hub Gujarat.

Ahmedabad’s AI and tech startup scene is growing, with around 27 companies focused on areas like machine learning, SaaS, and industrial automation, according to Tracxn data. Notable firms include Glib, drivebuddyAI, Metis Intel, Veloxhire.AI, and IntervueBox, all providing AI solutions. Additionally, recognised players like Instinctools and OpenXcell contribute to the city’s evolving technology landscape.

The city has also seen significant capital inflow, with SaaS platform Petpooja raising $15.4 million in September, and GVFL leading a $12-million funding round in Ahmedabad-based renewable energy company Soleos Energy.

Coimbatore

Coimbatore’s rise in the tech and AI landscape is closely tied to its manufacturing and engineering DNA. Often described as a deep tech tier-2 city, it is becoming a hub for AI-driven manufacturing, robotics, industrial IoT, and automation startups.

In Coimbatore, several AI and tech startups are gaining recognition as the ecosystem grows. Notable companies include Episyche Technologies, Green Collar Agritech Solutions, CountAI, Cognitica, and RobotoAI Technologies. These ventures highlight Coimbatore’s advancements in industrial AI, automation, and smart solutions.

According to the Department of Industry and Internal Trade (DPIIT), the city’s ecosystem has seen significant growth, with the number of startups increasing from 271 in 2020 to 1,350 in 2024, representing about 15% of Tamil Nadu’s ecosystem.

Kochi

Kochi is emerging as a GCC- and AI-led innovation hub, supported by robust digital infrastructure and long-term state investment through Kerala Startup Mission. The presence of Infopark and a growing number of global capability centres has elevated the quality of AI, analytics, cybersecurity, and health tech startups.

Rather than chasing scale-at-all-costs models, Kochi’s ecosystem emphasises sustainable product development, export-oriented software, and applied AI use cases, making it increasingly attractive to global clients and investors. Kerala’s startup funding in the first nine months of 2025 rose to $14.7 million, an ~147% increase from $6 million during the same period in 2024, according to Tracxn data.

Lucknow

Lucknow is fast becoming a North Indian startup nucleus, supported by aggressive state-level startup programmes and expanding academic-industry collaboration. Uttar Pradesh now hosts over 18,500 startups, according to government estimates, with Lucknow emerging as a center for AI-enabled govtech, agritech, drones, and vernacular digital platforms.

Lucknow is home to several notable AI and tech startups, including Arficus, Webllisto Technologies, and Brainsmiths Labs. The city features various incubation centres, such as the University of Lucknow Incubation Cell and IIM Lucknow’s Enterprise Incubation Centre, which offer mentorship and funding. Additionally, STPI Lucknow and local incubators like the Navyug Navachar Foundation and Integral Startups Foundation support early-stage ventures and innovation.

Indore

Indore’s startup momentum is driven by student entrepreneurship, affordability, and improving investor attention. The city has become a nursery for early-stage AI, fintech, and enterprise software startups, many of which are bootstrapped or seed-funded before scaling nationally.

Indore has 116 high-tech startups, according to Tracxn, including YatriKart and Onetab. Of these, 19 have received funding, with three securing Series A+ funding. In 2025 alone, five new startups were created. Over the past decade, an average of seven new companies have launched annually, many founded by alumni from IIT Kharagpur, BITS Pilani, and Stanford University.

Chandigarh

The Chandigarh-Mohali-Panchkula tricity has seen explosive startup growth, with the union territory home to over 633 DPIIT-recognised startups as of December 2025. High quality of life, strong education indices, and proximity to North India’s talent belt have made it a growing base for AI services, SaaS, and enterprise technology startups.

While funding volumes remain smaller than those of metros, the pace of ecosystem formation signals strong future potential. AgNext Technologies, IT Infonity, and DataKund are notable startups in Chandigarh’s growing tech scene, which also includes local innovators like Alpha AI.** **