Saturday, June 25, 2022

Slide Slide
Home SAAS Software-as-a-Service industry in India to be valued at $1 trillion by 2030

Software-as-a-Service industry in India to be valued at $1 trillion by 2030

 

In 2020, representing a 4X jump over the previous two years, Indian Software-as-a-Service companies raised $1.5 billion despite the Covid-19 pandemic

Rivalling the country’s large IT services industry, Indian Software-as-a-Service (SaaS) industry has the potential to be valued at $1 trillion and employ 500,000 people by 2030, according to a report by SaaSBoomi, a collective of SaaS and product company founders.

The report – Shaping India’s SaaS Landscape – released on Wednesday estimates that Indian Software-as-a-Service companies can grow revenues to $50 to $70 billion by the end of the decade, lending the industry a $1 trillion valuation based on current public SaaS company revenue multiples.

“This (SaaS) is one of the biggest opportunities in front of India in the next decade. What the tech services industry has done for the country in terms of jobs, exports, value creation and entrepreneurship, we believe that the SaaS opportunity will actually rival that”, said Noshir Kaka, Senior Partner at McKinsey & Company.

Including 10 unicorns, that generate a combined $2 to $3 billion in annual revenue and employ nearly 40,000 people, India currently has around 1,000 Software-as-a-Service start-ups the report, for which McKinsey & Company conducted third-party research and analysis, showed.

In 2020, representing a 4X jump over the previous two years, Indian Software-as-a-Service companies raised $1.5 billion despite the Covid-19 pandemic.

The country also minted six SaaS unicorns – Postman, Zenoti, Innovaccer, HighRadius, Chargebee and BrowserStack – during the last one year.

“SaaS is expected to generate about 80 per cent of software revenues by 2030, up from about 35 per cent today. As a result of these broad secular trends, the global SaaS market could be worth about $1.3 trillion by 2030 led by growth in content, collaboration and remote work enablement software”, SaasBoomi said in a statement.

Indian Software-as-a-Service firms could capture four to six per cent of this global opportunity, but in order to do so investments in product companies will need to grow by three to four times their current levels, while talent availability needs to scale by three to six times, SaaSBoomi said.

Further the number of Indian Software-as-a-Service unicorns will need to grow by 10X by 2030, it added.

“Today there is an opportunity for Indian companies to sell to global customers from India. Every category of software is up for disruption and one of the biggest tailwinds is that tech adoption by companies of all sizes is happening”, said Girish Mathrubootham, founder and CEO at FreshWorks.

Growth can be achieved by strengthening India’s market position in traditional areas such as horizontal Software-as-a-Service – CRM, ERP and collaborative applications – growing in the US and UK markets as well as Asia and MEA and capturing additional opportunities across segments such as new growth vectors such as data management and integration in middleware horizontals.

The report also highlighted four obstacles that need to be overcome for Software-as-a-Service start-ups to realize their true potential.

It said that through product and go-to-market excellence and developing talent at scale, Indian Software-as-a-Service companies face significant challenges around growth in earlier stages. It also highlighted that with focus on investing in core operational capabilities to scale and win, it needs to shift to a growth-first mind set.

The Indian Software-as-a-Service space also has had limited exits via acquisitions, buyouts or IPOs and so far only five to 10 per cent of Indian companies have had exits in the last decade, compared to 20 per cent of their US counterparts. The report said significant development of exit routes could drive the virtuous cycle of value-creation.

“While there are challenges ahead, these are not insurmountable and SaaSBoomi is of the view that there is nothing that can stop the Indian SaaS community from building on its strong foundation to make SaaS a preeminent industry in India that employs a lot of talent, contributes significantly to India’s GDP and creates unmatched global products and platforms”, said Manav Garg, CEO and Founder, Eka Software Solutions and founding partner of SaaSBoomi.

Also read: DigiYatra: A paperless journey experience for domestic air traveller

Do Follow: CIO News LinkedIn Account | CIO News Facebook | CIO News Youtube | CIO News Twitter

khushbu Soni CIO News Mercadeo
Khushbu Sonihttps://www.cionews.co.in
Chief Editor - CIO News | Founder & CEO - Mercadeo

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -1x1 banner1x1 banner1x1 banner1x1 banner

Most Popular

Digital literacy according to me is a seamless adoption of digital revolution, says Melwyn Rebeiro, Head of IT Security at AEON Credit Service India...

While youth have been at the forefront of technology adoption and will continue to be so, there has been a significant increase in digital...

India’s artificial intelligence investment to be 2.5% of global total in 2023

Firms are increasingly relying on contracting and gig models while focusing on building internal artificial intelligence talent through reskilling and up-skilling India, the world’s second...

Fin-tech start-up Setu acquired by Pine Labs in $70 to 75mn

Post the buyout, the fin-tech start-up, which has 90-100 employees will retain its brand identity, business and team The acquisition of the Bengaluru-based API fin-tech...

Cyber security strategist Dr. Mukesh Mehta joins Monarch Capital as Group CTO

Mehta describes himself as someone who is capable of solving the most critical problems revolving around the IT and the cyber security industries Cyber security...

Recent Comments