Leading Valley VC advises startups to avoid Bangalore

Norwest advises startups to go for Hyderabad
VCs See Red In B’lore Traffic Snarls
Financial Express

US venture capitalists are worried about the poor state of infrastructure in Bangalore, according to Norwest Venture managing partner Promod Haque.


Mr Haque, who has invested in over 50 companies, told reporters that he was “trying to encourage entrepreneurs to go to Hyderabad,” instead of Bangalore. He was speaking on the sidelines of ‘India Inc 2004’, a seminar on marketing and selling to the US.

With the hybrid model fast finding favour, most US companies are looking toward Bangalore for a possible development centre, mainly because of the the available talent.

But, Bangalore had become less attractive due to its traffic, people and real estate problems, Mr Haque said.

The city’s traffic problems which have to been seen to be believed are worsening. Bangalore has managed to attract the best brains in the country and huge competition for talent has driven salary levels to the highest in the country. Real estate prices too have zoomed, ironically pushed up in the first place by the IT companies themselves.

The next best alternative destinations in India were Hyderabad, Pune and Delhi (Noida and Gurgaon), he said. Mr Haque advises some of his investee companies to set up operations simultaneously in Bangalore and Pune.

According to him, other possible destinations could be Mysore, Chennai and Kolkata. Some smaller players were trying out newer places, Mr Haque said