The Indian SaaS (Software as a Service) Industry has grown suddenly over the past years. From only $2 billion in 2018, the Indian SaaS market is now at least $17 billion.
Besides market size, more Indian SaaS firms started maturing, and their funding grew. This sudden rise of the Indian SaaS industry led the world to see the country as the potential SaaS leader in the future.
Here’s an in-depth look at its current status, growth, and the expectations for its future.
⏳ Indian SaaS Timeline
- 1968 – The Indian SaaS industry dates back to the late 60s when TCS (Tata Consultancy Services) was founded as the first IT company.
- 1996 – Zoho, formerly AdventNet, Inc., was India’s first company to offer SaaS solutions.
- 2008 – The Indian SaaS industry’s funding exceeded $1 billion within a year.
- 2010 – Girish Mathrubootham and Shan Krishnasamy founded Freshworks, a cloud-based customer service software company.
- 2018 – Freshworks became a unicorn after it reached a $100 million valuation. In the same year, Billdesk also joined the unicorn club.
- 2019 to 2020 – two SaaS firms turned unicorns in 2019, and another six followed in 2020 despite the pandemic.
- 2021 – Freshworks became the first Indian SaaS startup to debut on Nasdaq. RateGain also followed as an initial public offering. In the same year, Zoho turned into a unicorn, and it achieved this without any external funding.
- 2022 – Nine more Indian SaaS firms became unicorns. In the same year, the investments in Indian SaaS startups exceeded $6 billion.
- 2023 – The Indian SaaS industry earned over $17 billion in revenue by the end of the year.In the Future – The Indian SaaS market is expected to grow to $25 billion by 2025, $35 billion by 2027, and $50 billion by 2030.
The Rise of SaaS in India: India SaaS Report 2023
The Indian SaaS Industry gained worldwide recognition with its high growth rate. As of 2023, the industry’s market size is already at $17 billion, over a 100% increase in the last three years.
Source: Bessemer Venture Partners
Based on its growth, the Indian SaaS Industry can reach $25 billion by 2025, $35 billion by 2027, and $50 billion by 2030.
To understand the rise of the Indian SaaS Industry, here’s an overview of its growth over the last five years.
Indian Saas Industry Overview: Growth Over the Years
The high expectations for the growth of Indian SaaS came from its sudden surge over the past five years. Besides the market size, the industry’s growth also became noticeable in other aspects.
The Sudden Increase in Indian SaaS Startups
In 2018, the SaaS industry in India only consisted of around 800 companies. This year, the country houses over 3,500 SaaS firms.
While thousands of SaaS Startups began in India over the past decade, 2018 has been the start of its peak.
That year, Freshworks, an Indian SaaS company, hit $100 million ARR and became a unicorn company. Two more Indian SaaS companies, iCertis and Druva, followed in 2019.
| 💡 Did You Know? Statistics show that 90% of startups fail, and there’s only a 0.00006% chance for a startup to be a successful unicorn. Moreover, becoming such takes around seven years. Thus, joining the unicorn club is a significant accomplishment for any startup. |
More Indian SaaS Companies Now Enjoy Over $10 Million ARR.
The sudden increase in the Indian SaaS market size was due to the maturity of many companies. This year, over a hundred Indian SaaS companies reached an annual recurring revenue of over $10 million.
Moreover, nine firms exceeded $100 million ARR in 2022. It’s an addition to 6 in 2021 and 5 in 2020. Thus, there are at least 20 Indian SaaS startups earning over $100 million every year.
| 🎉 Fun Fact The Indian SaaS startups alone account for $3 billion in total revenue for the country. They also give work opportunities to over 40,000 people. |
Eight-fold Increase in SaaS Capital Investments
Since 2018, over 1,600 SaaS companies in India received funding for long-term growth. Last year, investors spent almost $6 billion on Indian SaaS companies.
Source: Bessemer Venture Partners
These expenditures are almost 3.5 times higher than investments from 2020. It’s also eight times higher than the investments made in 2018 for the same industry.
This capital investment increase made significant developments to the potential of Indian SaaS. It also paved the way for more investors to see the country’s potential as the world’s future SaaS capital.
The significant drop in 2023 was due to the shift to AI opportunities. Nonetheless, more deals and opportunities continue in the Indian SaaS industry.
Indian SaaS Market Size Reached Global Heights.
A SaaS report from EY-CII expects the Indian SaaS market to cover at least 7% to 10% of the global SaaS market. It’s a staggering increase from the present size of only around 2% to 4%.
This prediction is due to the country’s high annual growth rate in the industry. Last year, more SaaS startups have entered the unicorn club. With more funding and investments, the Indian SaaS can grow more in the following years.
| 📈 The Rise of Indian SaaS Is Just Beginning. The Indian SaaS Industry has enjoyed the past five years as a growing period. With more startups, higher ARR, and increased capital and funding, it seems the growth of Indian SaaS has only begun. It also means higher expectations for the industry to thrive in the following years. |
Top India SaaS Companies By Revenue
The increase in Indian SaaS companies is an accomplishment. However, its outstanding performance makes the country’s SaaS industry grow higher.
Among the thousands of Indian SaaS startups, some of them reached high revenues.
Here are five notable SaaS companies in India with over $100 million ARR:
| Zoho | Founded in: 1996 | Revenue: US$1.0 billion |
 | Founder:Sridhar Vembu & Tony Thomas | Type of SaaS Offered:Billing SaaS |
| Unicorn Year: 2021 | Headquarters: Chennai, India | |
| Zoho is a global-first Indian SaaS company that offers a cloud software suite to businesses. One of its products, the Zoho Sprints, is one of the best roadmap software you can find today. | ||
| Chargebee | Founded in: 2011 | Revenue: US$115.4 million |
|---|---|---|
 | Founder: Jaspreet Singh | Type of SaaS Offered:Content Management System (CMS) SaaS |
| Centaur Year: 2019 | Headquarters:Santa Clara, California | |
| Chargebee is a global-first Indian SaaS company that specializes in management. It offers effective SaaS solutions to improve a business’ revenue growth. | ||
| Druva | Founded in: 2008 | Revenue: US$100.2 million |
|---|---|---|
 | Founder:Krish Subramanian, Rajaraman Santhanam, Saravanan KP, and Thiyagarajan Thiyagu | Type of SaaS Offered:Billing SaaS |
| Unicorn Year: 2021 | Headquarters: San Francisco, California | |
| Druva is a global-first Indian SaaS company offering SaaS-based data management and protection. It’s a privately held company with over a thousand employees. | ||
| GupShup | Founded in:2004 | Revenue:US$175 million |
|---|---|---|
 | Founder: Beerud Sheth | Type of SaaS Offered:Communication SaaS |
| Unicorn Year: 2021 | Headquarters: Cupertino, California | |
| GupShup is a global-first Indian SaaS company that offers an efficient messaging platform. This company helps small and large businesses emerge in markets and build experiences. | ||
| BillDesk | Founded in: 2000 | Revenue: US$270 million |
|---|---|---|
 | Founder: M.N. Srinivasu, Ajay Kaushal and Karthik Ganapathy | Type of SaaS Offered:Billing SaaS |
| Unicorn Year: 2018 | Headquarters: Mumbai, Maharashtra, India | |
| BillDesk is an India-first Indian SaaS company that offers an online payment platform. With this company, Indian citizens enjoy efficient banking and merchant website transactions. | ||
Besides the Indian SaaS companies that surpassed $100 million ARR and joined the unicorn club, some got listed as IPOs.
Indian SaaS Companies Have Gone Public As IPOs
Two Indian SaaS companies went public in 2021, listed as Initial Public Offering (IPO): Freshworks and RateGain.
Through this success, the Indian SaaS industry reached another milestone. It also became a factor for more investors to see the country’s potential to be the global SaaS leader.
Freshworks: The First Indian SaaS Company Listed as an IPO
 | Founded in: 2010 in Chennai, India | Headquarters:San Mateo, California |
| Founder: Girish Mathrubootham & Shan Krishnasamy | Type of SaaS Offered:Customer Relationship Management (CRM) SaaS |
While the Indian SaaS industry already enjoys remarkable growth, Freshworks’ listing as an IPO took it to greater heights.
Freshworks is an India-first SaaS company that offers business customer engagement software. On September 21, 2021, the company debuted on Nasdaq.
The listing helped the company’s valuation to reach $12 billion. The following day, Freshworks sold 28.5 million common shares at $48.75. It opened 21% higher than the IPO of $36 per share.
| 🎉 Fun Fact Freshworks is the first Indian SaaS company listed as an IPO. This listing marked a significant step in the growth of Indian SaaS. As of today, Freshworks’ current market cap is at $5.59 billion. |
RateGain: The First Global Indian SaaS Company Listed as an IPO
 | Founded in: 2004 in Noida, India | Headquarters:Noida, India |
| Founder: Bhanu Chopra | Type of SaaS Offered:SaaS for Travel and Hospitality |
RateGain is the first Indian SaaS catering to a global market that went public as an IPO. The company is one of the largest processors of travel and hospitality transactions.
This Indian firm provides efficient SaaS solutions for travel and hospitality businesses. It helps businesses improve their revenue generation through acquisition, wallet share, and retention.
The company went public from December 7 to 9, 2021, and then listed by December 17. The price band back then was ₹405 to ₹425 per share.
Future Indian SaaS Companies Reached Potential for IPO.
While no Indian SaaS company announced plans to go public, many already have the potential to do so.
Most US SaaS companies that go public or file for an IPO have an ARR of at least over $100 to $300 million.
If such is the case, about 20 Indian SaaS companies can already go public.
For instance, Innovaccer has already earned over $100 million ARR in only seven years. Older Indian SaaS like Zoho makes more at over $1 billion ARR.
Besides the two, about 14 to 16 Indian SaaS companies already earn such ARR or even more.
The only factor to consider is favorable market conditions. Also, most companies can (and might) already file for an IPO in the coming years.
Comparing Indian SaaS vs Global SaaS
The Indian SaaS industry doesn’t only thrive on a local scale. Its continuous growth is also noticeable on a global scale.
The Number of Saas Companies in India Ranks 5th Worldwide
Compared to other countries with the most SaaS firms, India is 3rd with a thousand companies.
Source: Statista
The United States still dominates the ranking with at least 17,000 SaaS firms. Meanwhile, India, France, and Germany have an estimated 1,000 SaaS companies.
| 📝 Note This data only covers country-based SaaS or SaaS catering to the local SaaS market. Newer statistics show that India has at least 3,500 SaaS companies. While it’s only an estimate, this puts the country second in the number of SaaS. |
Out of these 3500 Indian SaaS, around 2700 of them are startups. That’s a staggering increase, especially when ranked on a global scale.
Indian SaaS Revenue is the 5th Highest Worldwide.
Last year, Indian SaaS reached $13 billion in revenue. At over $15 billion this year, India now ranks 5th worldwide.
Source: DemandSage
The United States would still dominate with a staggering $401.6 billion. India would only be behind Italy, the UK, and Australia.
Indian SaaS Industry Tops Market Growth Rates.
The market size of the SaaS Industry shows the prominence of the United States. However, India also offers significant potential to become the future of SaaS.
Source: Business Today
The US still dominates the market with a whopping $140 to $150 billion in revenue. India ranks 2nd at around $13 to $15 billion, and the UK at $10 to $12 billion.
Despite the US’ massive market size and revenue, India’s market growth topples both countries. The growth rate of the US SaaS is only 15% to 20%. Meanwhile, India grows from 30% to 35%.
| 📈 India Surpasses Global Saas Leaders in Growth. India is far from leading SaaS countries like the US in size. However, it enjoys a higher growth rate, showing more potential to be the future SaaS leader. |
What to Expect on the Future of Indian SaaS Industry
Based on the current growth, the future has never been brighter for the Indian SaaS industry. Whether it’s the firms, revenue, and capital investments, Indian SaaS will grow higher.
Indian Saas Market Size Expects a Staggering Increase.
The current Indian SaaS market has a compound annual growth rate (CAGR) of 10.22% for 2023 to 2028. Thus, experts predict a staggering increase within the following years.
Source: Bessemer Venture Partners
Experts say that by 2025, the market size of Indian SaaS will be at least worth $25 billion. Moreover, it will be at least worth $35 billion by 2027 and $50 billion by 2030.
Investors Plan to Expand Indian SaaS Investments.
The continuous increase in Indian SaaS startups also raises its potential capital investments.
The funded Indian SaaS firms grew more than twice within five years. From only 750 funded Indian SaaS firms in 2017, it became around 1600 companies last year.
Further, at least 14 out of the 1600 funded Indian SaaS now exceeds $100 million in ARR. These firms have become Unicorns and Centaurs within only a few years.
| 📝 Note The previous year was good for Indian SaaS after it raised $5.1 billion in funding. However, it slowed by 40% YoY for two quarters as the global feeling softened. Despite the slow year, the future SaaS capital investment remains stable. |
This milestone attracted investors to keep investing with a promise of higher returns. Based on reports, at least 70% of investors plan to expand their Indian SaaS investments in the future.
Indian SaaS ARR Will Grow with Centaur and Unicorn Saas Firms.
Within only five years, the ARR of the Indian SaaS Industry is now at $17 billion. This staggering growth came from the startups’ maturity and scale.
Source: Bessemer Venture Partners
Several Indian SaaS firms today generate at least $50 million in revenue. These companies come from both India-first and Global-first categories.
By 2030, experts predict both types will earn $5 and $17 Billion ARR, respectively. Thus, around $20 to $25 Billion ARR of the Indian SaaS Industry will come from these new unicorns and centaurs.
| 🎉 Fun Fact Out of all Indian SaaS startups, over 85 companies earn over $10 million annually. Moreover, around 6 exceeded $100 million ARR in 2021 and another 9 in 2022 compared to only 5 in 2020. |
Many Indian SaaS investors see the potential. Thus, they plan to keep investing in these centaur and unicorn SaaS companies. With more funding, India and Global-first SaaS will contribute more to future ARR.
Sustaining the Continuous Growth of the Indian SaaS Industry
While the SaaS industry has the best growth potential, some challenges slow it down. Based on the performance of Indian SaaS, some actions can help sustain its growth:
Increasing Awareness of the Benefits of SaaS Solutions
One challenge that slows the industry’s growth is the lack of awareness of the benefits of SaaS solutions.
Indian SaaS firms go beyond the country and target global customers to gain more profit and growth. However, even India-first SaaS companies can achieve ARR growth in the country alone.
With campaigns on the benefits of SaaS solutions, more local businesses will try them. Thus, any Indian SaaS company targeting the domestic market can also grow.
| 📝 Recommendations To achieve such growth, Indian SaaS firms should invest in Go-To-Market campaigns. They should also improve customer marketing success by using their SaaS solutions. |
Investing in Go-To-Market Efforts and Customer Success
Several reports have proven the effectiveness of go-to-market for leading global SaaS firms. With product success campaigns, these efforts can increase customer retention.
| 💡 Did You Know? The leading global SaaS companies’ reports show they allot at least three times more on budget for these expenses than Indian SaaS. |
When comparing customer success, these global SaaS enjoy 90% higher customer success. It’s something to consider as a factor to improve and continue the growth of the Indian SaaS industry.
Increasing Talent Pool Size
Statistics show that India has a significantly high talent pool size. With over 1.5 million new engineering graduates annually, India is one of the best places for SaaS to thrive.
Besides the engineers, India has over 630 million Internet users. This data shows that the country catches up to digitization.
| 🎉 Fun Fact Around 722 million Indians use social media, which places the country second in the world in terms of social network usage. |
Such an advantage proves to be one of the reasons why the Indian SaaS industry holds so much potential.
To continue its growth, Indian SaaS firms must increase their talent pool by at least two to six times. This step involves ramping up the recruitment, training, and investments in tech resources.
| 💡 Did You Know? The SaaS salary in India is more than decent than other industries. It averages at around ₹ 601 per hour or ₹ 1,500,000 per year. Entry-level staff earn at least ₹ 800,000 per year, while experienced workers earn as much as ₹ 3,183,333 per year. |
Once the country improves on these three, the Indian talents will undoubtedly contribute to the continuous growth of the SaaS industry.
Maximizing Government Policies
The Indian government established several policies that fueled the SaaS industry’s growth.
For instance, the IT sector’s incentives and special economic zones gave SaaS firms a favorable environment. This policy also allowed more SaaS companies to grow and expand to the global market since 2015.
Another government policy was the Digital India Initiative. This policy proved to be crucial in the growth of the SaaS industry.
With it, Indian SaaS firms enjoyed a solid digital infrastructure. They also implemented policies supporting the tech industry.
These policies are only some factors that helped the growth of the Indian SaaS. However, experts believe there’s still room for growth and that these policies can do more for SaaS firms.
Maximizing these benefits is the key to sustaining the growth of the SaaS industry.
Conclusion
The continuous growth of the Indian SaaS firms shows how the country can be the SaaS leader in the future. India’s potential lies in its culture of efficiency, and improving its overall performance should start with it.
By focusing on the talent pool, awareness, and government policies, the Indian SaaS industry will surely soar high. Whether you’re an investor, SaaS user, or even a worker, looking at India means looking at an excellent SaaS opportunity.
FAQs on the Indian SaaS Industry
Why is SaaS growing in India?
The SaaS Industry in India continues to grow because of its efficiency. The country can upstart and scale SaaS startups with less capital. Indian SaaS companies also tend to build products faster and earlier.
How big is the SaaS market in India?
The current size of the SaaS market in India is $13 billion. Reports predict an increase of $25 billion in 2025, $35 billion in 2027, and $50 billion in 2030.
Why is B2B SaaS booming in India?
B2B SaaS reports show booming growth in India due to the excellent India SaaS ecosystem. Every year, over 50 thousand tech graduates become available for the market. These young, tech-savvy graduates contribute to the continuous growth of Indian SaaS.
How many SaaS unicorns are there in India?
As of today, 25 Indian SaaS companies have become unicorns. Freshworks and Billdesk are the first two unicorn SaaS companies in 2018. In 2022, nine more companies achieved such a feat. Fourteen companies also became unicorns from 2019 to 2021.
Sources
- The Economic Times
- Bessemer Venture Partners
- Business Today
- Bessemer Venture Partners
- DemandSage
- The Times of India
- Bain & Company
Aditya is an Azure DevOps and Infrastructure Virtualization Architect with experience in automation, infrastructure management, and designing and implementing virtualization solutions. His expertise encompasses both on-premise and cloud-based systems. Aditya's articles on TechJury serve as a reliable resource for individuals and organizations looking to harness the power of cloud computing, embrace automation, and leverage infrastructure-as-code practices.