Indian SaaS startups are maturing quickly, generating greater interest at all stages of the investment process. They help promote capital efficiency, establish talent pools, and improve growth prospects for employees and employers, making them extremely revolutionary in driving value development.

Despite economic difficulties, the Indian software-as-a-service business is gaining traction, with record-high investments in 2022, and is expected to reach US$ 35 billion in annual recurring revenue by 2027. More than 35 Indian SaaS firms had US$ 20 million or more in annual recurring revenue (ARR) in 2021, and investments in the field surged by 170% over 2020, reaching US$ 4.5 billion in 2021.

Furthermore, the government has established a number of incentives for software companies to develop a wide range of software products that address socioeconomic challenges. There are already over 1,650 funded SaaS businesses in India. Since 2019, the figure has more than doubled to 800. Employees of 21 Indian SaaS unicorns have started 186 SaaS firms during the last three years, with 60% of them originating within this time span.

Indian B2B SaaS startups are also projected to emerge as appealing M&A targets for global software corporations aiming to expand their product capabilities in niche areas. The Indian software-as-a-service (SaaS) ecosystem is rapidly expanding. The combination of digitization and the pandemic provided a boost to the SaaS sector. The Indian SaaS ecosystem is expected to grow its worldwide share by 4-5% by 2030, resulting in a US$ 50-70 billion revenue opportunity. Freshworks, Zoho, Postman, and Druva had created high-growth businesses selling to enterprises in the United States and Europe.

The majority of SAAS businesses operate in finance, big data analytics, human resources, and customer relationship management. According to the research, India currently houses over 1,650 sponsored SaaS firms.Since 2019, the figure has more than doubled to 800.Employees of 21 Indian SaaS unicorns have started 186 SaaS firms in the last three years, with 60% of them originating within this time span.

The expanding cohort of mature firms is another major indicator of traction in the India SaaS market. Since 2015, the number of private SaaS enterprises in the region with US$ 100 million ARR has progressively climbed from two to slightly under ten. Global and local public market investors are also showing interest in these scaled-up SaaS enterprises. Indian SaaS industry has witnessed 2 IPOs from both the domestic and global markets (e.g., Freshworks and RateGain) as well as a number of global strategic M&As.

National Policy on Software Products (NPSP)

The National Policy on Software Products seeks to establish India as a worldwide software product hub through innovation, increased commercialization, long-term Intellectual Property (IP), and the promotion of technology start-ups and specialised skill sets. Furthermore, the Policy seeks to link with other government initiatives such as Start-up India, Make in India, Digital India, Skill India, and others in order to build a strong Indian software products ecosystem.


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Post banner Image by JK_Studio from Pixabay


Jul 24, 2023

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