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The Indian Software as a Service (SaaS) landscape continues to mature rapidly, with more companies reaching larger scale and driving heightened investor interest. SaaS investment in India is forecast to reach USD4.5 billion in 2021, up 170% from $1.7 billion in 2020, while Indian SaaS companies are poised to reach $30 billion in revenue by 2025, capturing around 8% of the global SaaS market, according to a report from Bain & Co.
In 2021, more than 35 Indian SaaS companies had USD20M+ annual recurring revenue—a sevenfold increase over five years—with between seven and nine of these companies reaching the USD100M milestone (versus one to two companies five years ago).
The number of Indian SaaS exits increased 100%, from 6 in 2018 to 12 in 2021.
As the Indian SaaS landscape matures, founders have begun to expect greater involvement from investors. Investors are increasingly seeking to add value beyond simply providing capital and connections by providing operational support on go-to-market (GTM), product growth, expansion, and recruitment.
With a growing number of world-class founders and strong investor support, Indian SaaS companies are poised to reach USD30 billion in revenue by 2025, capturing an 8% to 9% share of the global SaaS market.
The highest interest in the SaaS market is for horizontal business software that includes enterprise collaboration, events tech, conversational AI, and HR tech. In horizontal infrastructure software, emerging themes include cybersecurity, devops and dev tools, and data, whereas edtech, healthcare tech, logistics tech, and e-commerce enablement are gaining traction in vertical markets
However, the demand for SaaS-specific talent is expected to grow two to three times in the next five years. To meet this need with new graduates, Bain & Co. says India may need changes to the university curriculum, standardized certification courses, and government initiatives for digital employment. To re-skill the existing talent pool, it says, founders, corporates, and government should offer training, courses, and mentorship programs.
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