The Rise of Regional Talent: Why India's Next Unicorn Teams May Not Come from IIM/IITs
Executive Summary
For years, the Indian startup ecosystem has celebrated pedigreed degrees—founders from IITs and IIMs, teams formed in metros, and unicorns born in Bengaluru or Gurugram. But the landscape is shifting. The next big Indian startup may not come from the corridors of elite Indian Institutes, but from smaller cities like Bareilly, Bhilai, or Bhubaneswar. With talent redistributing, infrastructure improving, and founders proving that grit trumps pedigree, Bharat is quietly rewriting the playbook.
Startups Are Moving Out. Talent Already Has.
The narrative that the best startup founders in India only come from elite colleges is breaking down—and data proves it.
- 10% of India's tech talent is now outside metros, with clusters rising in cities like Vizag, Jaipur, Kochi, and Indore.
- Hiring in small towns is 60–70% more cost-effective with lower attrition compared to metros.
- 65% of employees surveyed said they'd prefer to move out of metros if given the option.
This shift means the next high-growth startup teams may not be huddled in Koramangala co-working spaces but distributed across co-working hubs in Tier 3 towns. (Source: BCG – NASSCOM Future of Work)
Meet the Next Startup Team
Picture this:
- An AI engineer from Jaipur, building ML models for a global SaaS product.
- A self-taught fintech founder from Gwalior, scaling a lean, 4-person venture.
- A full-stack developer in Indore, who upskilled via free online courses and runs projects for a U.S. client.
They're not choosing small towns because they must—but because they can. Regional talent is no longer playing catch-up; it's setting the pace.
What's Fueling the Shift?
Several structural forces are accelerating this rebalancing of India's startup ecosystem.
1. Skill Over Resume
Less than 40% of soonicorn founders are from IITs, while over 60% hold Indian degrees beyond the "top tier. Non IIT/IIM founders are proving that outcomes matter more than institutional tags.
2. Reverse Migration
Post-COVID, top professionals relocated to their hometowns, and many startups followed. Remote-first SaaS ventures and fintech models made it feasible to build from anywhere.
3. Digital Infrastructure
With Digital India, broadband penetration, and programs like Skill India, entrepreneurship is now visible across 590+ districts.
4. Government Push
From Startup India recognition to MUDRA loans, support is decentralized. Several states now have 1,000+ recognized startups each.
Beyond IITs: What Founders & Funders Must Rethink
| Old Thinking | New Reality |
|---|---|
| "Top-tier college = top-tier talent" | Talent is distributed. Opportunity isn't. |
| "Metro teams are more committed" | Attrition is 50% lower outside metros. |
| "Start in the city, expand out" | Many are starting in Tier 3, scaling globally |
| "Small-town = small ambition" | D2C brands from small cities already ship to 6,000+ pincodes. |
This is not just about fairness—it's about competitive advantage. Startups tapping into regional talent gain cost savings, lower churn, and deeper commitment. (Source: ILO Rural Employment Report)
The Gaps That Still Need Bridging
Despite the momentum, challenges persist.
- Skill gaps: Only ~3% of India's workforce is formally trained; many smaller cities remain vulnerable to automation.
- Digital fluency ≠ job-readiness: Young workers may be tech-native but lack startup-relevant skills.
- Career ecosystems: Mentorship, networks, and market access are still concentrated in metros.
Without addressing these, the shift risks being partial rather than transformative.
Indifly's View: Building Teams Beyond Pedigree
At Indifly Ventures, we've seen that:
- A college tag cannot measure adaptability or grit.
- Startup founders in India from Tier 3 cities are not "pipelines"—they are talent engines.
- What early stage startup teams need is not just capital but business incubator ecosystems—mentorship, networks, and access to markets.
Through ventures like IndiKendra (digital financial services) and IndiPe (rural wealth solutions), we have backed founders who prove that regional talent delivers not only resilience but innovation. Explore our philosophy here.
Final Word
The next wave of unicorn founders may not carry IIT/IIM degrees—or even metro addresses. They may be self-taught coders, grassroots entrepreneurs, or startup founders in India from Tier 3 hubs.
The future of Indian innovation will not be limited to metro boardrooms. It will be shaped by startup teams solving regional problems with global relevance.
Let's stop asking where a founder studied
Let's start asking what they're solving, for whom, and from where