India To Have 900 Mn+ Active Internet Users By 2025
By 2025, a majority of new internet users, 56%, will hail from rural areas, and females will constitute 65% of the influx of new internet users.
India's SaaS Startup Surge
- 70 Bn+ India SaaS Market Opportunity By 2030
- 26 Bn+ Vertical SaaS Market Opportunity By 2030
- $20 Bn+ Total Funding
- 2.2K+ Funded SaaS Startups
- 27 Unicorns
- 22 Soonicorns
- 1.3K+ M&A Recorded From 2014 To H1 2024
India's SaaS Ecosystem
63% of Indian unicorns have their headquarters located outside of India
38% of Funded SaaS Startups Are Headquartered Outside India
In 2023, the amount of funding raised declined by 71% compared to previous year Funding Amount ($ Mn)
Horizontal SaaS Snapped Most Funding Poured Into Indian SaaS Startups
Between 2018 to 2023, vertical SaaS achieved a 18% CAGR in funding, outpacing horizontal SaaS at 10%
From 2018 to 2023, CAGR of deal count for horizontal SaaS accounted 3% and vertical SaaS accounted 6%
India's Biggest SaaS Funding Deals (2014-H1 2024)
Notable Investors Backing Indian SaaS Startup
India's Rising SaaS Giants
India's SaaS Surge: 2021 - A Year of Unicorn Birth
India's SaaS Startups: A Financial Deep Dive
Key Financial Metrics: Analyzing India's SaaS Landscape
Financial Health of India's SaaS Unicorns
Breaking Down the Costs: Employee Benefits in Indian SaaS
Indian SaaS Unicorns Made $3.7 Bn+ In Revenue In FY23 {54% jump in total revenue YoY between FY23 to FY22}
Indian SaaS Unicorns Spent $835 Mn On Employee Benefits In FY23 {31% jump in total employee benefit expense YoY between FY 23 to FY 22}
SaaS in an AI-Driven Future
AI/GenAI in Indian SaaS: Key Takeaways
- $70 Bn+ SaaS Market Opportunity By 2030
- $17 Bn+ Market Opportunity For GenAI By 2030
- 85% Indian SaaS Companies Have Adopted AI
- 1.5K+ AI-Powered SaaS Startups In India
- Bengaluru Accounted Highest Number Of AI SaaS Startups
- 70% of AI SaaS Startups In India Less Than 3 Years Old
The Expanding SaaS Ecosystem: A Global Analysis
- The SaaS industry has evolved significantly over the years. Initially dominated by large enterprises, the advent of the internet in the 1990s enabled mid-sized companies to enter the market, driving innovation and growth.
- Vertical software industry stood at $50 Bn in 2010 to $653 Bn in 2023 which is around 13x increase.
- This surge in Vertical SaaS startups is expected to continue, indicating a promising future for the industry.
AI-Powered SaaS
- The rise of GenAI is transforming the software industry, shifting the sales model from direct selling to assisted buying, much like what happened with the emergence of search engines and social media platforms. This shift allows software companies to reach broader audiences, engage customers more effectively, and drive growth.
- For Indian startups, GenAI is a game-changer. With new R&D hubs emerging across the country, Indian startups now have the chance to innovate using simplified tech stacks. While established companies may have an edge, the evolving landscape offers Indian startups exciting opportunities to create new applications and streamline enterprise operations.
The Future of SaaS in India: Powered by Generative AI
India's AI Boom: A $17 Bn+ Market Opportunity
- Growing Adoption Of AI-Powered Consumer Devices: The Indian consumer electronics market is experiencing a surge in demand for AI-powered devices, including smart speakers, smart home gadgets, and autonomous vehicles. This upward trend is projected to persist, thereby fueling the demand for AI software and hardware across the Indian market.
- Vibrant Startup Ecosystem: India is home to over 338 newly funded AI startups, ranking seventh in the world. The vast majority of startups in India are focused on the use of AI technologies rather than infrastructure. Indian AI startups have raised over $640 Mn since 2019.
- AI Talent Pool: Upskilling for AI is becoming increasingly popular in India. Everyone, from C-level executives to new hires, is becoming more aware of the application of artificial intelligence in their line of work. A recent report also noted that Bengaluru is home to world's second largest AI talent pool
GenAI: A Game-Changer - Top Use Cases to Watch
- In India, companies are gradually adopting GenAI, Estimates indicate that 30-40% of POCs by Global Capability Centers (GCCs) have been implemented in production, compared to 15-20% among domestic enterprises
- Around one-third of GenAI use cases are geared towards intelligent assistants, with 25% directed at marketing automation and 20% focused on document intelligence
- About 66% of India’s top 50 Unicorns already adopted GenAI, highlighting startups proactive approach compared to traditional players
India's Leap into AI-Enhanced SaaS
- Vertical SaaS is set to become increasingly prominent in Indian SaaS market, as the availability of specialized vertical data will significantly enhance its intelligence and capabilities
- More than 80% of BFSI (Banking, Financial Services, and Insurance) companies have already invested in AI or ML solutions over the past two years.
- Furthermore, 85-90% of these companies are planning to increase their investments in AI/ML technologies over the next two years
GenAI In Media And Entertainment: Value Creation & Use Cases
- GenAI impact of Gross Value Added on Media & Entertainment will be 20-24% by 2030
- The growth will be driven by AI's ability to enhance content creation, personalization, and distribution processes within sector
GenAI In Healthcare Sector: Value Creation & Use Cases
- GenAI impact of Gross Value Added on Healthcare will be 16-20% by 2030
- The growth will be driven by AI's capabilities in enhancing diagnostics, improving patient care, and optimizing operational efficiencies
GenAI In Financial Services: Value Creation & Use Cases
- GenAI impact of Gross Value Added on Financial Services will be 22-26% by 2030
- AI technologies will enhance customer service, automate processes, improve risk management, and provide advanced data analytics in the sector
GenAI In Education: Value Creation & Use Cases
- GenAI impact of Gross Value Added on EdTech sector will be 8-9% by 2030
- It will enhance automate administrative tasks, and provide advanced analytics for educational outcomes
GenAI In Ecommerce & Retail: Value Creation & Use Cases
- GenAI impact of Gross Value Added on Ecommerce/Retail sector will be 5-6% by 2030
- AI technologies will enhance optimize supply chains and provide personalized shopping recommendations
Challenges to GenAI Adoption in India
Accelerating SaaS with GenAI: 5 Key Growth Factors
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Knowledge Manager at Genpact (Genome - Growth Operations)
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