They are the quiet corner of the information technology world. Away from the talk-of-the-town fundraisings, and also layoffs, of the consumer internet startups, software-as-a-service (SaaS) firms have been hard at work, sometimes also serving their headline-hogging peers.
As the coronavirus pandemic decimates business and brings companies back to the drawing board, SaaS startups, too, are switching lanes to tide over the unprecedented disruption.
Pivoting models, the industry speak for a shift to a new strategy, finding new customers and changing price points are some of the measures they have taken.
For instance, Seekify, a customer-experience platform aimed at large consumer-facing businesses, is changing plans.
Barely a year old, Seekify works with mid-market firms that typically have 100-999 employees or enterprises, which have a workforce of more than a thousand. It helps them automate customer management issues, performance feedback and maps skills.
But now it is looking to extend its services to small and medium businesses (SMBs), which, according to Gartner, have an employee strength of less than a hundred.
“While our product was more geared towards large consumer-facing companies, we are looking to adapt it for mid-market SMBs as well,” Seekify co-founder Ajeet Singh Kushwaha said.
“During a pandemic, our psychology says that the bigger firms have a lot more to lose. That’s how we think about it. Therefore, we are looking to get more SMBs on board because automating customer experience and improvement is their need too.”
Small is big
The pandemic poses different sets of challenges to SaaS firms, which are a broad spread.
The sector includes Indian firms with overseas clients, Indian companies serving businesses at home and also offering sector-specific solutions such as software for the restaurant or travel industry.
While activities such as travel, eating out and going for movies are on hold and will be slow for months to come, software firms working in these sectors have been hit hard as well.
Conversely, SaaS firms working with companies in online education, gaming, content, streaming platforms, etc have their task cut out in managing the extra workload.
These companies are looking to make the most of the opportunities brought by the viral outbreak and the lockdown, which has made the switch from offline to online essential.
“For us, helping traditional industries like banking and retail is a big opportunity, especially during the pandemic, which has made the online presence more important,” said Raviteja Dodda, co-founder and CEO of MoEngage, a mobile-marketing platform.
When Prime Minister Narendra Modi announced the lockdown for the first time on March 24, retail giant Big Bazaar went online, taking orders via WhatsApp and delivering them at building entrances.
The sudden shift to online was challenging and the company was assisted by MoEngage.
In some areas where Big Bazaar’s supply chain was strong and it could deliver, demand was tepid. But the areas where it got most orders from had a weak supply network.
“While we were doing this (helping offline firms) anyway, it is a larger opportunity now and will be a focus point for us,” Dodda said.
Like Seekify, other startups also see smaller companies as big business.
CleverTap, a mobile marketing platform that works with firms like streaming service Disney + Hotstar, fantasy sports platform Dream11 and online ticketing service BookMyShow, relatively larger firms.
“Unlike earlier, we are exploring how to make CleverTap more accessible and attractive for earlier stage startups,” CleverTap co-founder Anand Jain said.
“Early-stage startups typically use some free product (or a free tier of a product) for their needs. Since retention will be becoming important in the post-pandemic world, it’s important to use something that makes it convenient and scientific to retain users even if you have to pay a bit for it.”
Many firms are counting on small businesses, including millions of mom and pop stores spread across the country, to go online and also pay for software solutions. And, the success of many of India’s SaaS startups hinges on these two crucial factors.
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