Tamil Nadu's start-up scene is thriving across smaller cities like Coimbatore, Kanchipuram, and Tirunulveli, which are playing a significant role in the state's entrepreneurial growth.

The state's start-up ecosystem has expanded dramatically from around 2,032 registered start-ups in 2021 to over 12,000 in 2025, fueled by strong government support and incubation networks.

Tamil Nadu has invested approximately ₹5,895 crore in entrepreneurship development, training nearly 23 lakh students, and collaborating with over 120 educational institutions to foster innovation.

The state is emerging as India’s largest deeptech hub, raising over $184 million in sectors like space, defense, and advanced hardware, supported by its manufacturing leadership.

Experts highlight that infrastructure, culture, and quality of life are essential for attracting and retaining top talent, with a focus on affordable spaces and vibrant social environments.

Despite its growth, Tamil Nadu's early-stage funding between 2022 and 2024 was only $308 million, significantly less than Bengaluru’s $2.2 billion, indicating a funding gap.

Building a strong entrepreneurial culture and improving access to venture capital are crucial for helping Tamil Nadu startups scale and keep their innovative talent locally.

However, the state faces challenges due to a weaker venture capital ecosystem compared to Bengaluru and Hyderabad, causing some startups to migrate in search of better funding opportunities.