The Rise of SaaS in India

Software-as-a-service continues to accelerate across the globe as industries and businesses shift toward cloud-based environments. With digitization increasing year-over-year due to an increasingly hybrid world, SaaS startups founded in India have seen significant growth in recent years. It is expected to be valued at $50 billion by 2030, India’s SaaS market has reached a critical inflection point as venture dollars deployed in the region reached $4.8 billion in 2021.

A report from the Chiratae-Zinnov India SaaS report for 2022 stated that by 2026, the Indian SaaS market will generate $100 billion in sales and that India may even pip China as the world's second largest SaaS nation in the next few years.

The India SaaS market has reached a significant inflection point due to three macro forces driving innovation. The India SaaS market is poised to become one of the globe’s top centers of innovation in the next decade. With technical and developer talent on the rise, a growing entrepreneurial ecosystem, and increased venture funding we look forward to seeing how India founders not only build household names for the country, but also grow them into the next generation of global Centaurs.

The emergence of digital rails for large industries has spurred development across a number of large industries, such as financial services (e.g., Aadhar and UPI). What this means is that over 1 billion people in India have unique digital identities and all banks and financial institutions are connected through a common transactional back end which is also linked to the same identity.

Secondly, with the rise of mobile internet, over 700 million people have smartphones in India, and similar to other regions, they use them for work as much as for their personal lives.

Finally, the rapid acceleration of digitization across all industries due to the global pandemic, has furthered digital sales in both goods, services, and software. During the pandemic, nearly all cloud software sales have been virtual (i.e., conducted over Zoom or another platform) leading to a new normal of software sales. This means that Indian SaaS companies can now target global customers sitting in India without the need for an elaborate global office setup.

A report says, many global SaaS leaders from India, including Zoho, Freshworks, Browserstack, iCertis, among others, gained significant traction because of virtual selling. With these macro changes picking up speed, India’s SaaS market has gained the attention of the venture ecosystem too.

S Mohini Ratna, Editor, VARINDIA