Indian SaaS Industry Continue To Boom, Poised To Clock $100 Billion

SaaS led solutions would be one of the biggest enablers for companies willing to transform digitally. The digitalization and optimization of internal processes become easy and recurrent with the help of SaaS-based solutions. It not only helps in expediting the entire digital transformation journey but is also cost-efficient.

As per Gartner’s report, the  SaaS business is growing at 32% CAGR and this will continue to increase. The flexibility that the SaaS model provides w.r.t adapting to the changing technological landscape, cost optimization, faster time to market and independence from having to maintain IT infra hardware, is certainly going to shape the future and will be the way forward for Software application business.

The Indian SaaS juggernaut is experiencing a ‘coming-of-age’ moment, with an incredible bull run that has firmly anchored its position on the global stage. The SaaS industry is set to clock in a massive $ 100 billion in revenues by 2026. This was underscored by the 2022 edition of the Chiratae-Zinnov India SaaS report.

“SCS Tech is investing significantly on capability building on SaaS and application Cloud technologies. We are also in the process of entering into some strategic alliances with leading industry OEMs who provide SaaS-based solutions,” shares Sujit Patel, CEO and MD, SCS Tech.   

As the industry has matured, profitability has become a realistic milestone for SaaS companies, and they have cracked the Enterprise conundrum with over 40% revenue contribution. On the global stage, India is gearing to supersede China as the second-largest SaaS nation in the next few years.

India is a major market for android devices with over 95 per cent of devices deployed in the enterprise segment. “With the launch of our new Devops for Android features, our focus in 2022 is to expand our customer base as well penetrate into emerging verticals like healthcare, smart signages, retail, and hospitality. We hope to create a strong network of partners VARs/Corporate resellers/ISV and SI’s who can help us expand our footprint and customer coverage,” Vishranth D, Director Sales and Partnerships - APAC, Esper mentions.

The early SaaS companies are attracting unicorn valuations and also successfully listing on the public markets. These successes, coupled with stronger fundamentals and the path to profitability, are making SaaS companies in India an attractive investment theme. The industry aims to attract a strong private capital infusion of close to USD $ 6.5 Bn in the coming year alone, notes the report.

Key findings on the year gone by

1. Indian SaaS witnessed massive growth at a ~55% CAGR in 2021, with revenues well-poised to cross USD $ 100 Bn by 2026
2. The next wave of digital talent is expected from tier-2 and tier-3 cities; a vast pool of ~3 Mn+ digitally skilled workforce will be the perfect munition for SaaS companies to scale up in the coming years
3. The tremendous growth in the sector as well as the significant reduction in the time to achieve unicorn status have created ~90 per cent of all SaaS unicorns in the last four years alone, with the potential for many more in the offing, thus adding to a large pool of Soonicorns
4. Post surpassing the UK this year in the number of SaaS unicorns, India is all set to leapfrog China and become the 2nd largest SaaS nation by 2026
5. The various pro-startup policies will play a key role in attracting more founders and investors.