That is the best-case situation for India’s fast-growing SaaS trade, which has grown its revenues by 5 instances—from $1 billion in 2015 to $5.three billion in 2020—and has seen a 2X development within the variety of corporations, the report by Chiratae Ventures and consulting agency Zinnov says.
Even when the trade’s present compounded annual development charge (CAGR) of round 51% is maintained for the subsequent 5 years, the nation’s SaaS revenues might develop to as a lot as $42 billion by 2025, and the trade will cross the $1 trillion valuation mark someday this decade, it mentioned.
“Within the final decade or so, the SaaS market from India has gone by way of a transformational change, whether or not it’s by way of the merchandise, use instances, or the entrepreneurial surge that’s coming in. We really feel that this can be a rising trillion-dollar alternative,” mentioned Praveen Bhadada, managing companion at Zinnov.
The report additionally tasks that India’s SaaS sector might make use of greater than 260,000 individuals by 2025, up from round 50,000 as we speak, as international funding and fast-paced development, a few of which has been accelerated as a result of Covid-19 pandemic, drives the sector ahead.
Whereas income per worker for IT companies corporations in 2020 was round $47,000, the income per worker for SaaS companies had already topped $100,000 per worker final yr, rising virtually 30% over the earlier yr, it mentioned.
“It’s no secret that the way forward for enterprise and scale is SaaS-driven, extra so within the post-pandemic panorama. What’s attention-grabbing, nonetheless, is how rapidly Indian corporations have set a world benchmark for the trade,” mentioned Venkatesh Peddi, govt director and head of SaaS at Chiratae Ventures. “The exponential development unlocked within the final 5 years is a testomony to how capital environment friendly the Indian SaaS trade is.”
SaaS unicorns are greater than twice as capital environment friendly as their consumer-facing friends, on common elevating simply $92 million earlier than reaching a valuation of $1 billion, in comparison with $204 million raised by client startups, it mentioned. That is driving an enormous inflow of capital into Indian SaaS, and has additionally drawn in main buyers resembling SoftBank, Tiger World and others.
India’s SaaS sector has drawn in $6 billion in investments to date, of which $four billion has come within the final three years alone, with over 600 international enterprise capitalists investing within the sector, based on the report.
The nation’s software program merchandise sector has additionally developed a wholesome pipeline of fast-growing companies over the past 5 years, with 5-Eight corporations having crossed the $100 million annual recurring income mark, 7-12 of them crossing the $50 million ARR mark, and 40-50 companies having an ARR of $10-$50 million.
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