How Indian SaaS Industry Can Touch Global Highs Over 1,600 Indian SaaS companies were funded over the past five years, out of which around 14 of them exceed $100 million in ARR (Annual Recurring Revenue) as compared to five in 2020.
By Nilesh Patel
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Over the past decade, "Building from India for the world" has emerged as a powerful paradigm shift that demonstrates the Indian SaaS industry. This mindset has encouraged young SaaS founders in India to develop reliable, fast-speed, and innovative solutions that cater to the needs of diverse global markets. Furthermore, the SaaS industry is expansive and displays a relatively uniform growth pattern. It is also highly egalitarian because it transcends national borders and interfaces with various industries.
As a result, the SaaS ecosystem in India rapidly evolved, as did its US counterparts, with companies leveraging digital go-to-market strategies and product/solution-led growth models to drive customer acquisition. In the early years of our startup, we faced the daunting challenge of convincing investors that we could not only develop a successful portfolio in India but also effectively sell to customers across the world. Despite initial scepticism, we persevered to prove that an excellent, user product/software that matches the market needs can hit a six in both, India and world.
Today, the industry is witnessing a remarkable transformation in the global perception of the Indian SaaS ecosystem as investors and industry leaders increasingly place their trust in our rapidly evolving industry. In fact, over 1,600 Indian SaaS companies were funded over the past five years, out of which around 14 of them exceed $100 million in ARR (Annual Recurring Revenue) as compared to five in 2020.
Like any fastgrowing industry, the SaaS industry in India is not without its challenges. One of the biggest obstacles is the lack of awareness among Indian businesses about the benefits of SaaS solutions
One area where SaaS solutions are making significant headway is B2C sales automation, with particular emphasis on the edtech, e-commerce and retail sectors.
HOW DID THIS CHANGE HAPPEN?
It is important to examine the factors that drove this transformation in the Indian SaaS industry and how it has reshaped the global business landscape over the past decade. This can be attributed to numerous factors, such as:
Internet Infrastructure: The rapid expansion of internet infrastructure, including increased bandwidth and improved connectivity, enabled Indian companies to leverage cloud-based technologies and offer their services globally. A skilled workforce entails employees regularly upskilling and reskilling. This has brought a significant impact on the industry as this talent pool could easily combat the gap between the organization and the current markret trends.
Government Policies: Our government's policies, such as the establishment of special economic zones and incentives for the IT sector, helped create a favourable business environment for SaaS companies, enabling them to grow and expand globally in the 2015. Moreover, the government's Digital India initiative has played a pivotal role in driving the growth of the SaaS industry by fostering a robust digital infrastructure and implementing policies that support the tech industry.
CHALLENGES
One of the biggest obstacles is the lack of awareness among Indian businesses about the benefits of SaaS solutions. Some of the major challenges faced by leaders may be: Roadblocks in ramping up critical talent, such as product management, R&D, sales, marketing, and services and support talent pools. To compete globally, Indian firms need to increase their talent pool size in these areas by three to six times and include giving opportunities to talent from tier 2 and tier 3 cities. It is vital to ensure, their capabilities aren't neglected.
Indian SaaS companies need to invest more in go-to-market efforts and customer success to increase retention rates. It is stated in many reports that global SaaS leaders spend more than three times as much on go-to-market efforts than Indian firms and 90% more on customer success.
