The rise of artificial intelligence (AI) is forcing SaaS companies to rethink product development, with investors pushing for AI-native offerings. Speaking at SaaSBoomi 2025 in Chennai on March 25, Rajan Anandan, Managing Director at Peak XV Partners, urged founders to leverage AI to create significantly better products while reducing human dependency.
"AI lets you build 10X better products," Anandan said, emphasizing that the last decade saw incremental improvements in SaaS, but no underlying technology to drive exponential change—until now. "If you are not building a 10X product, then stop. You have the benefit of not having the legacy," he added.
Anandan noted that with AI taking center stage, deal sizes are increasing, especially in the early and seed stages.
"$15 million in Series A today is the new $5 million in Series A a year or two ago," he said.
Anandan's comments come at a time when startups like Sarvam have raised $40 million, and AI firm Krutrim secured $50 million in funding during their seed stage.
With agentic AI—systems capable of autonomous decision-making—companies can streamline operations and reduce the workforce required to build and scale products, he said.
Anandan’s assertion that SaaS companies should now be able to achieve these improvements "with 90% fewer humans" signals a shift in how AI-driven companies will be structured. As investors increasingly favor AI-powered startups, SaaS founders will need to integrate AI at the core of their businesses—or risk falling behind.
With venture capital dollars flowing toward AI-first companies, the SaaS landscape is rapidly evolving.
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