India’s tech capital Bangalore has slipped to 20th spot from 15th position in the Global Startup Ecosystem Ranking 2017.

According to a report released by Startup Genome, Bangalore’s position was undermined due to the entry of cities such as Beijing, Shanghai and Stockholm, which performed better on parameters such as exit ratios and quality of talent.

“Bangalore’s startups have struggled to nab foreign customers. In the talent index, it has challenges with access and quality—engineers haven’t been hired very quickly, experience is average and visa success is low,” the report said.

However, the garden city remains a cost effective destination. “The bang for the buck is still hard to beat, as Bangalore’s engineers are the most cost-efficient among the global top 20,” the report added.

Silicon Valley retained its position as the world's best place for startup talent followed by New York City. Delhi was among the top runners-up from India, however, it remained out of the top 20 global rankings.

“Along with Delhi, Sao Paulo, Denver-Boulder, Atlanta, and Seoul showed the size of their ecosystems competed closely with that of the top 20 ecosystems,” the report pointed out.

According to the report, almost 45 percent of Bangalore’s startup founders have gained at least 2 years of prior work experience in a startup. About 94 percent of such founders have a technical background – the highest rate in the world.

On the performance front, the city was decently placed at 11th spot.

“A lot of times I have seen Indian companies making (valuation) projections similar to their Silicon Valley peers without actually having the penchant to create global brands like the Silicon Valley companies do,” said Kanwaljit Singh Founder and CEO at Gaussian Networks.

Companies such as Microsoft Ventures, Qualcomm, Tesco, Walmart and Cisco have setup startup accelerators in the city.

The Bangalore-startup ecosystem is valued around USD 19 billion. The primary reason startups move to India is because it is easier to find good technical employees, Bangalore has the cheapest annual salary of for an engineer, about USD 8,600 a year, which is nearly 13 times cheaper than in Silicon Valley.