The rise & rise of India SaaS

This year Indian SaaS firms have raised ~$5 Bn in over 250 deals. While this sector has seen it all this year - crazy salaries, massive valuations, layoffs - it can be safely said that SaaS in India is at an inflection point. There's only one way to go from here. ????

1986 - Tally Solutions Pvt Ltd , OG of software, gets launched

Believe it or not, its distribution & installation was in the form of hard disk (mostly floppies)

1991 - Birth of World Wide Web, for use by general public. Internet will change the way software is distributed, forever.

1996 - Zoho got founded, poster boy of Indian SaaS. Killer product is one thing. Years later multiple ex-Zoho's will go on and setup killer other companies. Proudly referred as the Zoho Mafias. Freshworks and Chargebee are few of those dons.

The period is late 90s and early 2000's, Indian clients are not as attractive as the ones in US. Hence, software and IT services are exported to the US.

'On-premise' software delivery and hosting data locally is the norm.

Soon, companies would realize 'on-prem' is costly and not agile. Companies would start demanding cheaper and faster alternatives, without compromising data security.

In a far away land from ours, Jeff Bezos and Andy Jassy would start solving this for themselves.

2006 - Amazon Web Services (AWS) started as an experiment. This would become the moment of reckoning for SaaS.

2008 - Wall street crash. Boom. Indian software & services companies can cut margins and keep on selling to the US. They do exactly that and software gets its shot in the arm.

Companies kept on creating 'horizontal' solutions and selling to the US. Products solving digital workflows, omni channel CRMs become the talk of town.

2010-2016 - Thanks to smartphone penetration, mobile device focussed use-cases and companies supporting them, proliferated. The time is ripe for InMobi Advertising and MoEngage 's of the world...err India.

With VC starting to flow in, lower cost of distribution, cheaper and smarter talent availability, the India growth story started exploding.

Demand for specialized software trickled in from US. India saw 'verticalization' of software. Innovaccer , Zenoti , LocoNav being prime examples.

Proliferation of software led to the demand of 'backend' tools to support the #ecosystem. Welcome to the party Chargebee , Postman , Whatfix .

2016-2020 - The Jio era. Believe it or not, 'digitization of SMB' wave was really started when internet became accessible for the masses. These folks were really new to the 'digital economy' and required specialized solutions. Khatabook , OkCredit and other dukaan techs waived this flag high.

With software usage booming in India, we started building in India and for Indian consumers. But the fact remains. Indians are tough to monetize. Particulalry the SMBs. Lending is how every company serving SMBs will be betting their life on. 'You use my product for free, I will monetize your transactions.'

2020 - Half a decade later, 'Verticalization' of sotware will catch up in the Indian market as well.

Call it Covid induced, western influenced or whatever, India is now witnessing a wave of startups designing for specific industrries. Classplus , Cropin , BharatAgri all of them have understood core needs of a very specific sector and are building for it.

With government support, investor confidence and the wave of digitization, the stage is primed for India SaaS story to reach escape velocity.

2023 will be India's year in SaaS. And the world will watch in awe.

#software #saas #india