India’s software-as-a-service (SaaS) market is projected to be valued at $50 billion by 2030 and is poised to become one of the globe’s top centres of innovation in the next decade, as per a report by venture capital (VC) firm, Bessemer Venture Partners (BVP).
BVP is a global VC that has $9 billion of capital under management. In India, the company backs Swiggy, UrbanCompany, PharmEasy, BigBasket, Livspace and Perfios. Its global portfolio includes Pinterest, Shopify, Twilio, Yelp, LinkedIn, PagerDuty, DocuSign, Wix, Fiverr and Toast.
India as an emerging global leader in the cloud space and a hybrid working model, that continues to accelerate around the globe, will feed into demand for cloud-based environments, the report said. The venture ecosystem’s support to the SaaS space was critical so far and was needed to grow further. Venture dollars deployed in the region had reached $4.8 billion in 2021 with expectations for that to increase even more, BVP said.
“For Indian SaaS founders, there could be no better time than today to take advantage of the digital rails and rising cloud adoption and build category creating products, not just for India, but also for the world,” said Anant Vidur Puri, partner, Bessemer Venture Partners. The five key predictions were: Global market leaders and category creators will be built from India, fintech for all, enabling e-commerce, productising services and digitisation of healthcare.
“The SaaS model is a great engine as it generates predictable revenue streams every year. If you add to that, the India advantages of culture of efficiency and multi-product strategy, you turbocharge the same engine with higher sales efficiency and net retention. We are constantly identifying companies that can build for India and the globe, leading us to five key predictions — market leaders and category leaders will be built from India, productisation of services and acceleration in fintech, e-commerce and health care,” Puri added.
Freshworks, Zoho were companies it named as examples for global leaders that will be built from India. It also says that there will be a rise of fintech solutions, wherein the technology becomes more inclusive banking on digitally enabled bank, giving Perfios and Lentra as examples under fintech for all. Next, the report said the coming decade will see e-commerce becoming mainstream in India. New software solutions will emerge to ensure even the smallest business can go online and serve every single pin code. The report also adds that there will be an increasing number of companies which sell services as their products, PepperContent for marketing for instance.
Last, the VC firm expects an increase in the digitisation of healthcare where new software businesses will be built to increase insurance penetration and finance healthcare costs. Healthplix is a company doing that for example. Indian SaaS companies have the potential to be more efficient than their global counterparts. The BVP Nasdaq Emerging Cloud Index shows the median efficiency of global SaaS companies stood at roughly 40%, about half of their Indian counterparts which had an efficiency rate between 80% and 100% or higher sales efficiency even when these businesses approach $100 million annual recurring revenue (ARR), based on our initial