Multiple factors are coming together to accelerate the growth of India's SaaS sector, and $100 billion in annual revenues isn't a pipe dream, the managing partner at Zinnov, who heads its emerging technologies practice, writes
Indian SaaS is having its moment in the sun. Never before have all factors converged in a manner that puts Indian SaaS firmly on the global stage, and well on its way to clocking in $100 billion in revenue by 2026. The last two decades have been phenomenal for the SaaS space, having transitioned from SaaS 1.0 in the mid-2000s, to surpassing SaaS 2.0 in the early 2010s, to experiencing its coming-of-age moment in 2021. With unicorns galore and successful public market debuts under its belt, Indian SaaS is set to transition from a pupa into a full-fledged butterfly. Interestingly, it stopped being an ‘India vs the globe’ debate a long time ago, with Indian firms becoming as global as any other SaaS firm, hiring talent where necessary, exploring newer business models to cater to global customers, and creating customer stickiness above it all. Unlike most consumer tech businesses, SaaS, in general, is more capital-efficient in nature, and the entire business model revolves around predictable recurring revenue from customers. In that sense, higher growth with lower cash burn is fast becoming a realistic milestone for many Indian SaaS firms, which in turn has resulted in higher valuation multiples for these businesses.