Bengaluru: Over the last two decades, the SaaS space in India has undergone a transformational evolution across dimensions of products, use cases, market, customers, talent, and funding.
The landscape has metamorphosed and matured to bring about a chromosomal change in the Indian technology ecosystem and is poised to provide a massive boost to the Indian economy in terms of growth and employment rates.
The Chiratae–Zinnov study titled, “Indian SaaS Revolution: Rising Trillion Dollar Global Opportunity,” explores the factors driving this explosive growth, the surge of unicorns in the space, and also where the industry is heading in the next five years.
Explosive Growth of SaaS in India
Factors such as sticky revenue stream, high capital efficiency, ease of scalability, resilient business models, and the evolving consumer demand have made enterprise SaaS a highly attractive avenue for companies and entrepreneurs alike.
A formidable combination of resident unicorns such as Freshworks, Postman, Uniphore, Druva, etc., and non-resident unicorns such as Zscaler, Nutanix, Automation Anywhere, etc., are putting the stake in the ground for India’s role in shaping the local and global SaaS narrative.
Enterprise SaaS: An Entrepreneur’s Paradise
Indian founders and entrepreneurs are trailblazing alongside their global counterparts and have created billion-dollar SaaS companies that are giving tech giants stiff competition.
Of the 51 unicorns in India, 10 are from the SaaS space, with 4 joining the coveted unicorn club in 2021 alone. This propulsion of start-ups into the unicorn club has been accelerated by global Venture Capital (VC) investments, especially in the last decade.
The study highlights that global VCs have been at the forefront of capitalizing on the rising trillion-dollar Indian SaaS opportunity, with VC investments surging 10X in the last 10 years.
Investments to the tune of USD 6 Bn have been made in Indian SaaS companies so far, with ~USD 4 Bn coming in the last 3 years alone. With more than 600 global VCs actively investing in the Indian SaaS industry, the stage is set for many more unicorns to emerge over the next few years.
The PERFECT storm fueling the Indian SaaS Revolution
SaaS companies are innovating and building new product segments, which are differentiated by the confluence of technologies being leveraged. There are nearly half a million skilled product managers working on these globally competitive SaaS products that leverage new-age customer-centric product design to build enterprise-grade products.
The Indian SaaS space is the epicenter of a major SaaS revolution, with Indian SaaS players poised to fulfill 19 per cent of the global SaaS demand by 2025. The global SaaS market is estimated to reach a massive USD 400 Bn by 2025, and this will firmly position Indian SaaS companies as major players on the global stage. World-class products and platforms, rising interest from global VCs, and a vast pool of digitally skilled technology talent have put Indian SaaS companies on a decidedly firm footing.