Steady growth projected for Software as a Service market

09 October 2023 2 min. read
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The Indian Software as a Service (SaaS) sector has shown remarkable resilience in the face of a stubborn economic downturn and funding constraints. That is according to a survey from global consulting firm Zinnov and venture capital firm Chiratae Ventures among over 130 SaaS founders and investors.

SaaS companies in India are expected to exceed $26 billion in revenue by 2026, with year-on-year growth more than doubling. Mainstays in the SaaS scene, according to the report, are a healthy dose of investor and founder confidence as well as solid product leadership.

In 2022, there were 10 to 12 Indian SaaS companies that recorded revenue of over $100 million – 11 to 13 more recorded over $50 million in revenue.

Indian SaaS market is expected to grow 25x

“In the face of a challenging global economy, the Indian SaaS industry has been defying odds and attracting significant investments. The industry has shown remarkable resilience and growth potential, solidifying its position as a global SaaSpowerhouse, with the number of funded start-ups rising by 2X in just the last four years,” said Sudhir Sethi, founder and chairman of Chiratae Ventures.

Despite economic uncertainties, 93% of surveyed founders anticipate revenue growth in the next year. Investors maintain confidence in the so-called ‘Indian advantage’, particularly in growth areas like DevOps, Cybersecurity, and Vertical SaaS.

India ranks third globally, in terms of SaaS unicorns

Across all sectors, there are currently just over 100 Indian unicorns. Of those, 21 are SaaS companies, according to the report. That puts India in third place for the most SaaS unicorns in the world, behind the US in first place, and China in second. As of earlier this year, the combined valuation of those Indian SaaS unicorns is estimated at circa $58 billion.

The industry’s stability is reflected in its resistance to valuation fluctuations, which contrasts with global trends. With India leading in the development of AI and taking a prominent position in the Web3 landscape, more growth in the technology segment is expected to follow.

9 out of 10 investors opine that India’s quality tech talent

9 out of 10 investors said that they believed that India holds a competitive advantage in its tech talent pool. India is a leader in science and technology education, with numerous prestigious higher education institutions preparing very capable, young tech workers for industries like SaaS.

Looking ahead, Zinnov and Chiratae Ventures said SaaS firms will prioritize revenue growth while ensuring operational and capital efficiency.