India could be on the cusp of unlocking a $1 trillion opportunity for SaaS companies, creating nearly half a million new jobs in the process over the next nine years, according to the “Shaping India’s SaaS Landscape” report released by SaaSBOOMi, Asia’s largest community of SaaS (Software-as-a-Service) founders and product builders.
SaaSBOOMi is a community of SaaS Founders and product builders shaping India’s SaaS industry. The community started in the summer of 2015 as an informal group of SaaS founders looking to network and learn from each other. Since then, India’s SaaS industry has grown to become over $1.5 billion in annual revenues, with around 800 companies as an active part of the community.
SaaSBOOMi conducted the in-depth research and analysis for this report, in association with knowledge partner McKinsey & Company and supporting partner NASSCOM.
There are nearly a thousand funded SaaS companies in India, of which ten have unicorn status, with a valuation of over $1 billion. These startups generate about $2-3 billion in total revenues and employ nearly 40,000 people, the report said.
Indian SaaS ecosystem may need to increase funding to 3 to 4 times current levels to reach its potential over the next ten years. This requires concerted support across all stakeholders – industry associations, government, corporates and investors to scale talent by 3 to 6 times, the report said.
Startups need to shift to a growth mindset
On average, Indian SaaS companies with annual revenues of under $5 million are growing at only about 50% compared to 150-200% for their global peers. To reach 20X multiples, Indian companies may need to grow significantly faster. The report shows that Indian SaaS companies are underinvesting in their go-to-market efforts: those with revenues under $5 million spend only about 25% of revenues on GTM compared to 80-90% spent by global leaders.
Over the last one year, Indian SaaS companies have leveraged tailwinds to reach unprecedented heights in terms of scale and scope. Six new SaaS unicorns were born during the pandemic: Postman, Zenoti, Innovacer, Highradius, Chargebee and Browserstack. In 2020, $1.5 billion was invested in Indian SaaS companies, representing a 4X jump over the last two years, the report added.
Manav Garg, CEO & Founder, Eka Software Solutions, Founding Partner SaaSBOOMii: “India has an exciting opportunity to propel itself on to the world stage as a SaaS force to be reckoned with. While there are challenges ahead, these are not insurmountable and SaaSBoomi is of the view that there is nothing that can stop the Indian SaaS community from building on its strong foundation to make SaaS a preeminent industry in India that employs a lot of talent, contributes significantly to India’s GDP and creates unmatched global products and platforms. The findings in this report will provide Indian founders with insights that will help them engage in long-term planning and accelerate future growth.”
Sharing her thoughts on the report launch, Debjani Ghosh, President, NASSCOM, said, “The Indian SaaS ecosystem has the potential to create $1 trillion in value and nearly half a million jobs by 2030, owing to digital transformation and automation in organizations across sectors. Increasing digital transformation is accelerating SaaS adoption aiming to perform analytics & AI and data management applications. To create awareness around the potential of SaaS in India, it is imperative for the Government to collaborate with industry associations, investors, and corporates, and drive large-scale training programs by partnering with universities and institutions.”
“India is now a hotbed of innovation with nearly 1,000 SaaS companies and 10 unicorns. I couldn’t be prouder of how far this community has come on the journey to bring India’s SaaS industry to the world,” said Girish Mathrubootham, founder and CEO of Freshworks. “I’ve always believed that for those of us who have helped pave the way, we owe it to others to pay our learnings forward. When we share knowledge, experience, successes, and even failures, as we do at SaaSBOOMi, we make entrepreneurship more accessible than before.” Girish Mathrubootham, Founder & CEO, Freshworks and Founding Partner, SaaSBOOMi.
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