India’s Software-as-a-Service (SaaS) industry has the potential to be esteemed at $1 trillion and employ 500,000 people by 2030, rivalling the country’s large IT services industry, according to a report by SaaSBoomi, a cooperative of SaaS and product company founders.
Recently, The report - Shaping India’s SaaS Landscape - released estimates that Indian SaaS companies can grow revenues to $50-$70 billion by the end of the decade, lending the industry a $1 trillion valuation based on current public SaaS company revenue multiples.
Noshir Kaka, the Senior Partner at McKinsey & Company, states, “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.”
India currently has around 1,000 SaaS startups, including 10 unicorns, that generate a combined $2-$3 billion in annual revenue and employ nearly 40,000 people, the report, for which McKinsey & Company conducted third-party research and analysis, showed.
In 2020, Indian SaaS companies raised $1.5 billion despite the Covid-19 pandemic, representing a 4x jump over the previous two years. The country also minted six SaaS unicorns - Postman, Zenoti, Innovaccer, HighRadius, Chargebee and BrowserStack - during the last one year.
The Indian SaaS space also has had limited exits via acquisitions, buyouts or IPOs and so far only 5-10 percent of Indian companies have had exits in the last decade, compared to 20 percent of their US counterparts.
Manav Garg, CEO and Founder, Eka Software Solutions and founding partner of SaaSBoomi, states, “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.”
