Big SaaS deals soon

Several Software-as-a-Service or SaaS deals are expected to be sealed soon as risk investors continue to support Indian cross-border enterprises building products that attract global clients. Many firms are in talks to raise funds, Chargebee is expected to double the funds’ investments with new funds of around $3-3.5 billion. Existing investors, Sequoia Capital and Tiger Global, are  is expected to back Chargebee. Another San Francisco based healthcare firm, Innovaccer, is also in talks to raise US$ 3-4 billion, according to sources. An Artificial Intelligence driven talent engagement and communication platform, Sense, is in talks with SoftBank Vision Fund for an investment of US$ 500 million.

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Such big deals of huge valuation which grabs investors’ attention on SaaS companies which is further glazed  by Nasdaq public offering of Freshworks. SaaS companies are holding a value of 25-40 times of Annual Recurring Revenue (ARR). They are valued as a function of ARRs. The other Indian SaaS have also been joined by the first Indian SaaS unicorn, Freshworks. Within the past two years the companies such as Postman, Browserstack, Innovaccer, Zenoti, Icertis, Druva, High Radius and Mindtickle have hit the mark of $1-billion valuation. US investors focus on neglected ‘value’ stocks is the core reason for the decline in Freshworks’s valuation.

Emergence of new class of investors and digital play have helped to boost the scale of valuations. “We’ve seen the market shift from companies largely serving domestic businesses to best-in-class product-led companies that have global demand. We think India is well positioned to be the next leader in global SaaS,” Deven Parekh, managing director at Insight Partners, said an investor.