India to have more US$ 1bn SaaS cos

Arpan Sheth, Senior Partner, Bain & Company, opines that India can have as many as three Indian software-as-a-service (SaaS) businesses with more than $1 billion in revenues in the coming years. Bain & Company’s India SaaS Report 2020, states that Indian SaaS entities are increasingly tapping into new segments including small and medium enterprise (SME) and under-penetrated verticals that have been witnessing growth in software adoption.

The report expects that Indian heritage SaaS companies are set to reach US$ 18 billion to US$ 20 billion in revenue and acquire 7-9% of the global SaaS market by 2022 from 3-4% in 2019. It adds that the pandemic did not play a spoilsport in terms of the investments that the sector attracted. There was a rise in investments in SaaS from 15% in the first half of 2019 to 20% in the corresponding period this year.

“SMB-focused SaaS companies are flourishing given the vast and growing SMB market opportunity. SMBs accounted for 40 per cent of global software spend in 2016, and that was up 10 percentage points to 50 per cent in 2019. Indian-heritage SaaS companies like Freshworks, Zoho, Kissflow, and Chargebee have built a strong SMB customer base across a number of countries by tapping into this opportunity,” Prabhav Kashyap, Associate Partner, Bain & Company stated.