The Indian software-as-a-service (SaaS) industry is witnessing fast growth as the number of new startups is increasing greatly and they all are doing a lot of activities together for Saas technology up gradations. It is believed that by 2025, India will become the SaaS startup hub of the world. According to a market study conducted by iSPIRT and Signal Hill, 59 % of early-stage startups have confirmed that India is the highest revenue- generating market because SMEs from all industries are seeking for low-cost effective SaaS technology due to its advantages and convenience. However, this is true for India based early-stage startups only, whereas big enterprises are developing new models for taking up SaaS in their business environment.
Big part of this market is led by the US and big-ticket size deals also come from there only. This particular market area contributed to more than 50% of the total market share in 2016, Gartner’s report confirmed. The total size of the global market is expected to be more than $100 billion in the next few years and India will have $10 billion revenue by 2025 acquiring 8-10 % of the global market.
Investors Embracing SaaS Opportunities
The investors and financial companies have embraced the SaaS opportunity with both hands. Tracxn, an intelligence startup and market research platform confirmed that since 2010 more than $1.484 billion has been invested by national and international investors into the Indian SaaS starups. Key names of the most active investors who are supporting SaaS startups in India Accel Partners (invested in Freshdesk, Mobstac, Mindtickle, Chargebee, Hotelogix, Zettata), Blume Ventures (invested in Hotelogix, FrameBench, WebEngage, Mettl, Mobstac, Zipdial,), Sequoia Capital (invested in Capillary Technologies, Druva, Knowlarity, Practo), Nexus Venture Partners (invested in Druva, Unmetric, Indix, TargetingMantra, Genwi, Helpshift) and Norwest Venture Partners (invested in Act-On, Attune BlueJeans, CRMnext, Capillary Technolgies,). The most recent SaaS funding deals include;
OhoShop, a SaaS based m-commerce enabler has raised $1 million in funding from BCCL.
iMangeMyHotel, an ERP SaaS product providing end to end solution for hotel secures USD $50,000 funding from Jaarvis Accelerator and has been selected for their acceleration program.
Oi Media, a SaaS marketplace platform raised undisclosed amount of seed funding from early stage VC fund, Quarizon.
Factors Driving the SaaS Industry
What makes India, a potential global SaaS product hub? Well, multiple factors contribute for the success of the SaaS market. It is growing fast, mainly because there is an increase in the number of startups in various industries and a boost in acceptance of on-demand software has been observed from every industry in recent years. SaaS is driven by factors like convenience, easy access and efficient operation among others. It is fast and reliable with customization features and low-cost advantage. Moreover, it is easy to deploy on various platforms like public cloud, hybrid cloud, private cloud and community cloud etc.
Additionally, the growth of SaaS industry is also witnessed by a bunch of young startups, including CloudCherry, Zoho, Zarget, Freshdesk, Vymo, KiSSFLOW, Chargebee and Sirion Labs and many others. Many of them expanded their operations globally and raised venture capital funding successfully. These startups had secured their revenue mainly from retail players, banks, e-commerce startups, regulated bodies and many other market segments that did not exist in India until a few years ago. All these factors are favouring Indian SaaS startups directly.
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