PurposeThe purpose of this paper is to provide the insights on the challenges influencing rural start-ups. It provides insights with regards to managerial, operational, marketing and finance-related challenges influencing the rural start-ups in the study. The study aims to expand the domain of start-ups by including a broader range of challenges and related aspects found in the start-up literature.Design/methodology/approachThe paper opted for an exploratory study using the open-ended approach of grounded theory, including 61 rural start-ups operating in Karnataka, India. The data were analysed through non-parametric test to understand the comparison between different sectors of rural start-ups.FindingsIt suggests that marketing techniques and infrastructure challenges influences the rural start-ups. Therefore, success of start-ups is influenced by these related variables.Research limitations/implicationsBecause of the chosen research approach, the research results may lack generalizability. Researchers are therefore encouraged to test the proposed propositions further in the area of challenges and growth in the domain of managerial, infrastructure, marketing, finance, human resource and logistics in rural start-ups. The study is restricted to rural start-ups located in districts of Karnataka, India.Practical implicationsThe paper includes implications for managing the challenges for enhancing the growth of start-ups. The paper provides insights on the significant challenges witnessed by the start-ups and provides directions for the growth of start-ups.Social implicationsThis paper fulfils an identified need of the start-ups in rural sector and contribute to the growth of start-ups in rural sector of India.Originality/valueThis paper fulfils an identified need to study how rural start-ups operate and create a niece in the growth of Indian economy.