Gujarat, a state historically renowned for its strengths in trading and as a magnet for large investment in heavy industries, is in a hurry to jump aboard the startup express. Incubators and accelerators have mushroomed in cities such as Ahmedabad — at least a dozen at last count — ventures are sealing early-stage funding and the government too is getting into the act, with a new policy and an ambitious summit to woo these fledglings. Even as the leading startup hubs of Bengaluru and NCR buckle under the pressure of overpopulation and an undercooked infrastructure, many cities in Gujarat are putting up their hands to be counted.Harshvardhan Lunia, cofounder and CEO, Lendingkart, an online lender to small businesses, is perhaps the state’s most feted startup with over $32 million in venture capital and debt funding. He believes Ahmedabad has several ingredients in place to evolve into a new hub. “For startups looking to conserve funds in these challenging times,” he says, “Ahmedabad offers talent and real estate at as little as 50% of the cost of larger startup hubs, with practically none of the headaches associated with living and working there.”He should know. Lendingkart runs a technology centre out of Bengaluru, and Lunia unceasingly complains about the traffic gridlock he has to suffer each time he visits India’s IT capital.It may be too soon to celebrate. Entrepreneurs say the quality of talent in Gujarat, especially in Ahmedabad, needs improvement if it is to be considered as a heavyweight startup hub. Ritam Bhatnagar has founded two startups (one in media and another in geolocation) and says the state is plagued by poor levels of education, especially for technical talent.“Right now, the toughest question from investors is not about location, but how we will get talent here and retain them for a significant amount of time,” he says. The explosion of startup incubators has only bred a series of mediocre ideas, rather than any breakthrough innovation As more startups take root in Ahmedabad and beyond, the big shift needed is actually one of mindset, reckons Sandeep Patel, CEO of Let’s Recycle, a waste-management platform. For example, traditional businesspersons prefer debt rather than equity — the lifeblood of fast-growing startups.Older businesses are averse to bringing in external investors, board members and advisors to hasten growth, he adds. “Many of these old rules need to change for entrepreneurs here to make a serious impact,” he says.Startups such as Lendingkart and younger ventures such as Lets Recycle, Locanix, a logistics tech startup, OneWayCab, an intercity cab service provider, and Bhatnagar’s geolocation venture wWhere have all benefited from being in a non-metro like Ahmedabad, even if it has taken longer for them to be noticed by investors. “For the first three years of our existence, we bootstrapped our venture and learnt how to make every paisa count,” says Ruchit Surati, CEO and cofounder of Locanix.In June this year, he got some relief, when his startup closed funding from senior executives of Goldman Sachs and Cisco. It has signed up dozens of customers — including Amul, which it helps in monitoring the big fleet of refrigerated trucks. As Ahmedabad picks up pace, different pieces of the startup ecosystem are maturing. For example, towards the end of the year, a 40-acre campus of iCreate (International Centre for Entrepreneurship and Technology) is expected to be inaugurated. iCreate, a joint venture between the Gujarat Mineral Development Corporation and the Gujarat Entrepreneurship and Venture Promotion Foundation, will use this new campus as an integrated facility to offer funding, space and mentoring to entrepreneurs, says K Thyagrajan, a founding member. “We have 15 incubated projects. Three or four are ready to be commercially spun off,” he adds.Industry watchers such as Thyagrajan believe that Ahmedabad has several enabling factors that are catalysing this new wave of entrepreneurship. For one, Ahmedabad has several top-notch educational institutes, including an IIM, IIT and NID. What’s more, startups can also potentially collaborate with several state-owned facilities such as Isro’s Space Application Centre, Physical Research Lab and the Institute of Plasma Research to further their plans. While technical talent is hard to find, the costs are far less.“We save 50% on manpower costs, and office space too is far cheaper,” says Surati of Locanix. The investment community — especially angel investors, who were scarce in the state — is also steadily expanding. Two angel investor forums , Ahmedabad Angels and Gujarat Angel Investor Network, are increasing their numbers.The state government is aggressively chasing entrepreneurs. According to its new policy, the Gujarat government wants to set up 100 incubators statewide to germinate these ventures, develop a million square feet of space and attract funding of a billion dollars in startups in the next five years. In addition, startups would get 100% waiver on stamp duty and registration, a 100% rebate on electricity duty for five years and 50% assistance to incubators for software purchase up to Rs 1 crore.These kind of sops are expected to attract startups to other cities such as Vadodara, says Rajvi Makol, founder of GingerCrush, an online merchandising and bespoke apparel and accessories vendor. The firm, which raised a million dollars in early funding from investors like Brand Capital (owned by the same company that publishes ET Magazine), is building what it calls a Makers and Takers business, which allows anyone with design skills to upload their wares to GingerCrush and have their own web presence. When orders are received, GingerCrush processes and ships them, charging a commission to those who have listed their wares on the site. “Despite being located in Vadodara, investors were agnostic to our location, and instead, keen to back a scalable business plan,” says Makol.Being in a smaller town may have other advantages that spur innovation. For instance, there are 500-700 cabs that make the two-hour commute between Ahmedabad and Vadodara, yet most users have to pay a return fare. Vivek Kejriwal started Vadodara’s first radio cab service with over a dozen cabs, but latched onto this long-distance opportunity to launch Onewaycab. “Vadodara allowed me to keep the costs low and devise a cab service that offers rides for rates that are 55-60% less than existing options,” he claims. After fine-tuning his service on the Ahmedabad-Vadodara route, Kejriwal has now been able to expand to other well-travelled commuter roads in Gujarat and beyond.Like Kejriwal, Gujarat too wants to get on the startup fast lane.