An old joke goes that when Neil Armstrong landed on the moon, he found a small Udupi restaurant there, selling piping hot idlis and dosas. That's what the sleepy coastal Karnataka town was famous for. If you said Udupi, you thought of its quick-service south Indian eateries.

So when in 2004 engineering graduate Anila Andrade landed a job with Robosoft Technologies, an information technology (IT) start-up based in Udupi, she felt she'd missed the big city bus. "Udupi didn't seem the place to be for a career in technology. I wanted to be in Bangalore," she remembers.

But a decade later, as she rapidly progressed from a software tester to associate vice-president, 99Games Online, a subsidiary of Robosoft, her doubts were laid to rest. "Unlike multinationals, start-up companies offer huge learning and growth potential," says Andrade, who currently manages strategic investments for the company.

If she had any lingering doubts about life in Udupi, Shah Rukh Khan blew them away last month. The Bollywood superstar launched a mobile game for his upcoming film, Fan, at Yash Raj Studios, giving due credit to the company that created it - 99Games.

"The whole team watched the event live from the conference room, cheering when Khan mentioned our company," Andrade says.

IT entrepreneurship and starting-up, clearly, are no longer a big city phenomenon. While Bangalore and Hyderabad may still be India's big tech hubs, a start-up culture is taking root in the twin towns of Udupi and Manipal, producing dozens of tech-entrepreneurs with nifty ideas.

"India's start-up boom is happening in small towns such as Udupi," asserts Roshan Bava, who founded Niveus Solutions, a mobile app designing firm, with Mohsin Khan in Bangalore in 2010. He moved lock, stock and barrel to Udupi a year later, lured by the cost advantages the town offered. "A lot of people are seeing the value in moving to Udupi," he says.

When Steve Jobs launched the App Store in 2008, there were 552 apps available for download on the iPhone. Today, millions of apps, a humongous number of Angry Birds and billions of downloads later, app development has grown into a $25 billion global market.

The app store economy has also democratised digital creation. "You don't need a big set-up to start a mobile app or game development enterprise - just a small space, computers and a few gaming-junkie engineers," says Sumanth Shetty, founder, Wristcode Technologies, a 15-people app development and cloud solutions firm that works out of a threadbare office on the Udupi-Manipal Road. The company posted a turnover of Rs 60 lakh last year.

Bava estimates that about three to four tech start-ups are being set up in the temple town annually. Most are bootstrapped garage ventures, with less than 100 staff. But the work is at par with global IT requirements. "A niche technology work area like mobile apps and gaming is developing here," Bava emphasises.

Take the case of Star Chef, a cooking and restaurant management game created by 99Games for Apple's iOS platform. Launched in August 2014, the game has raked in $7.5 million in revenue - the highest an Indian gaming company has earned so far. Also, the multi-culinary mobile game built a global fan base - with 35 per cent users in the US and 30 per cent in Europe.

"Star Chef got the global tech community looking for Udupi on the world map," says Rohith Bhat, founder, Robosoft Technologies. The company has created 16 games so far. With 1,400 apps in its kitty, garnering a total 300 million downloads, it posted a turnover of Rs 50 crore last year.

Bhat started Robosoft as a one-man company from his sister's flat in Mumbai. "All client interaction was on email. So I realised I could be sitting in Udupi or Timbuctoo and doing the same work," recalls the techpreneur. The company moved to Udupi - Bhat's hometown - in 2000, becoming the first IT enterprise in town.

Udupi, clearly, is no longer seen as a town that's out in the boondocks. In fact, the twin towns come as a surprise for first-time visitors.

Located 60km from Mangalore, Udupi boasts of pristine, white beaches and is dotted with temples, old-world red tiled roof buildings and lush coconut trees. Also, like any Tier II town, costs - from human resources to rentals - are low, commutes are short and fewer people quit jobs.

With 40,000 students studying at the Manipal University, the town has the pulse of a young place. The sprawling campus of Manipal, the country's only university town, has food courts, movie halls, a 1,50,000-square-foot state-of-the-art sports complex and air-conditioned hostels for international students.

The Udupi-Manipal Road looks like a glitzy metropolis high-street - with branded showrooms, pubs, pizza and burger joints and a multiplex.

"Udupi is now a throbbing, cosmopolitan town. Our employees don't feel like they live in the middle of nowhere," says Bhat, whose company has built an Indian language interface for Apple Mac in Gurmukhi, Gujarati and Devanagari and also developed five out of the 200 apps that debuted on App Store in 2008. Its clients include Disney, Warner Bros Pictures and Heineken.

About 60 per cent of Robosoft's workforce is from the South Karnataka district. With 21 engineering colleges dotting the district, Udupi has a huge talent pool for tech firms to tap into. Some believe that it is the constant stream of talented graduates that has spurred the start-up boom in Udupi.

"The biggest hero in the Udupi story is the local talent pool," says Rahul Shetty, CEO and co-founder, Growth Beats. "What matters most in IT companies is people. And this resource is available in abundance," he says.

It works for the new graduates, too. Unlike some years ago, working in a start-up company is now the cool thing to do. "Engineering graduates don't hanker for multi-national jobs any more - they'd rather get their hands dirty in a start-up. This has made Udupi's technology ecosystem prosper," says Shetty.

With companies zeroing in on Udupi, real estate is booming. Multi-storey apartments are being built at double-quick speed, and land prices have increased by over 30 per cent in the twin towns in recent years.

But Udupi - with a population of 1.65 lakh - does not come without its share of problems. When Bava of Niveus moved to Udupi in 2011, he found it difficult to get suitable office space. The town did not have efficient Internet bandwidth. Local chartered accountancy and law firms had no inkling of IT laws. "We had to teach them how software companies operate," Bava says.

But five years later - with a boom in the local real estate market - he has seen the town's infrastructure grow by leaps. "A small pool of an IT support industry is also emerging in the town," he says.

However, unlike Bangalore, the twin towns still do not have any dedicated technology parks to support the growth of the IT industry. Entrepreneurs also complain about not always being able to lure senior employees from the cities to the smaller town. While it's easy to find entry-level employees in Udupi, lateral hiring remains a hurdle, Bava says.

But for the businesses, the pros far outweigh the cons. Salaries are 30 per cent lower than what Bangalore-based IT companies offer. Rentals are low, too. "This cost benefit percolates to the clients. So small and midsize companies prefer to do business with start-ups based in small towns," points out Umesh M.K., founder, Infouna Technologies, a web development start-up in Udupi.

Across Udupi, big and small offices underline the change that the town has been witnessing. The circular, glass-fronted Robosoft office, on National Highway 66 that skirts Udupi, houses 600 people - employees of the parent company and its subsidiaries.

On the other hand, the office of Ironjaw Studios - an old bungalow in a quiet corner of Manipal - looks like a holiday hangout spot. Plants grow wild in the sprawling front yard. A guitar and a drum set stand in one corner of the conference room. Sam, a full-grown Alsatian, greets visitors with a bear hug before returning to snooze under a computer table. The company follows a "pets allowed in office" policy, founder Niroop Mohandas stresses.

A four-year-old gaming company, Ironjaw has developed 10 casino games, which have had six million downloads on Google Playstore. In 2014, the company won $56,000 at an app competition held in Bangalore for its racing game High on Fuel.

"Developing quality games requires high creativity. It can't happen out of a cubby-hole office in a Bangalore tech park," says Mohandas, adding that Bangalore is too noisy for his liking.

Mohandas doesn't see Udupi and Manipal growing as exponentially as Bangalore. "I don't think the multinationals are going to make a beeline for Udupi - it doesn't have the support systems. The town will witness linear growth, as a start-up destination," he predicts. And that suits him just fine.

Meanwhile, the aroma of hot food wafts in the air in Udupi. Clearly, there is space for both sambar and start-ups here.