Dharamshala, 12th September: India began its metamorphosis into a worldwide IT powerhouse more than two decades ago, ushering in a period of unprecedented riches and employment growth in the country. Now, Asia’s third-largest economy is poised to embark on the next big technological challenge: creating a new generation of software startups similar to Zoom or Slack.
The Covid-19 pandemic has compelled businesses all over the world to invest heavily in digital infrastructure, bolstering the power of software-as-a-service (SaaS) providers. According to a KPMG poll, businesses spent an extra $15 billion per week on technology last year as they tried to build safe remote working environments.
SaaS companies create web-based apps that take care of everything from software security to performance. Zoom (ZM), SAP Concur, and Salesforce (CRM), the American juggernaut that owns workplace messaging software Slack, are among the most well-known SaaS businesses in the world.
According to recent research published by consulting firm McKinsey & Co. and SaaSBoomi, a community of industry experts, India’s software-as-a-service business could be worth $1 trillion by 2030 and create over half a million new employment.
According to the survey, India has roughly a thousand such companies, ten of which are unicorns, or startups worth at least $1 billion. “This has the potential to be as huge an opportunity as the IT services business was in the 1990s,” said Girish Mathrubootham, CEO of Freshworks, India’s most well-known SaaS firm. It filed for an initial public offering (IPO) last month, joining a slew of other large Indian IT unicorns to do so this year.
Freshworks was started in the southern Indian city of Chennai more than a decade ago. It, like Salesforce, provides software to assist businesses in managing client relationships. It is also India’s oldest unicorn in the business, having acquired funding from Tiger Global and Accel and boasting a customer base of over 50,000. According to analytics provider Tracxn, the company was last valued at $3.5 billion in a fundraising round in 2019. Other Indian SaaS companies have found success by focusing on particular markets. For example, Zenoti is a unicorn that specializes in spa and beauty shop software.
Six of India’s ten SaaS unicorns will reach that milestone in 2020, and investors all over the world will be watching. According to the SaaSBoomi study, investors invested $1.5 billion in Indian SaaS startups last year, four times more than in 2018 or 2019.