India’s SaaS companies to open up $1 trillion opportunities, 5 lakh jobs by 2030
Indian SaaS communities have been one of the beneficiaries of the pandemic as the enterprises embraced digital. Such digital transformations will drive a 60 percent increase in enterprise tech over the next ten years, a report by SaaSboomi and McKinsey said.
July 08, 2021 / 03:25 PM IST
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India’s Software-as-a-service (SaaS) industry can reach $1 trillion valuation and likely employ close to half a million jobs by 2030, said a report by the community of SaaS founders, SaaSBoomi.
Indian SaaS communities have been one of the beneficiaries of the pandemic as the enterprises embraced digital. Such digital transformations will drive a 60 percent increase in enterprise tech over the next ten years, the report said.
The report “Shaping India’s SaaS Landscape” said the global SaaS market is expected to cross $500 billion in revenue by 2025 by growing at 18-20 percent annually. The report also noted that out of nearly a thousand funded SaaS companies in India, 10 have a unicorn status with a valuation of $1 billion. The startups generate about $2-3 billion in revenues and also employ close to 40,000 people.
Out of the ten unicorns eight of them are BrowserStack, a cloud web and mobile testing platform; Freshworks, an online cloud-based customer service; Postman, a collaboration platform; Zenoti, a cloud platform for salons, spas and med spas; Chargebee, a subscription billing software; Highradius, a fintech platform; Icertis, a contract management software and Dhruva, a data protection firm for the cloud.
The global SaaS market is also expected to cross $500 billion in revenue by 2025 growing at 18-20 percent annually. SaaS has come of age, with nearly a thousand funded SaaS startups and ten unicorns. SaaS companies collectively generate $2-3 billion in annual revenue and employ nearly 40,000 people and have a potential to create $1 trillion in value and nearly half a million jobs by 2030.
However to tap this potential, there is a need for more investment and exit routes. Investments in the Indian SaaS industry stood at $1.5 billion in VC funding in 2020 alone. But a lot more would be needed to keep this momentum going. The Indian SaaS space also has had limited exits via acquisitions, buyouts or IPOs so far only 5-10 percent of Indian companies had exits in the last decade, compared to 20 percent of their US counterparts. Significant development of exit routes could drive the virtuous cycle of value-creation.