New Delhi: The Indian Software-as-a-Service (SaaS) industry is poised to grow by 2.5X to reach a revenue if $26 billion by the end of 2026 despite a current slowdown due to tight macroeconomic pressure and a stiff funding winter.
“Though concerns of a recession loom large, the Indian SaaS industry has displayed remarkable antifragility to withstand turbulent times. An overwhelming 93 percent of the founders surveyed, anticipate an increase in revenues in the next 12 months,” said a report by the latest edition of the India SaaS report, jointly done by VC firm Chiratae and Zinnov, a management consulting and advisory firm.
Indian Software-as-a-Service (SaaS) companies are doubling down on growth (revenue generation) while ensuring operational and capital efficiency, the report said. Indian SaaS equity funding rose by 30 percent to $419 million in 2022 with 2,780 deals as against 2,605 deals in 2021 with a total funding of $319 million.
Despite a widely acknowledged funding winter in the Indian start-up ecosystem, seed-stage funding witnessed a 1.5X increase, while early-stage funding experienced a notable 1.6X surge in value during 2022, the report said. In fact, Indian SaaS start-ups secured 3X more funding in 2022 compared to 2019, demonstrating a steady CAGR of 47 percent.
“However, the decline in SaaS company valuations in the public markets has greatly affected private markets, driving down late-stage funding,” The report said.
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