Investments in Indian Software as a Service (SaaS) rose to $4.5 billion in 2021, growing 170% from 2020, driven by a surge in the number of $50 million + deals, according to a report released yesterday by Bain & Company, a global consultancy firm.
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The report titled 'India SaaS Report 2021: SaaS companies will lead India’s next wave of technology giants', highlighted that the Indian SaaS landscape is maturing fast with more companies scaling up and attracting investor interest.
“With heightened interest in SaaS, India has witnessed the emergence of dedicated SaaS-focused funds as well as participation from new investor categories," said Arpan Sheth, Bain & Company partner and leader of the firm’s India’s Private Equity and Alternative Investor practice.
A growing investor interest in segments including enterprise collaboration, events tech, conversational AI, and HR Tech have boosted funding and these segments accounted for more than half of all SaaS funding in India, according to Bain & Company.
EdTech, Healthcare tech, logistics tech, e-commerce, cybersecurity, DevOps and dev tools, and data management are the emerging themes.
India now has 13 SaaS unicorns and 7 to 9 companies with annual revenue of over $100 million. Select Indian SaaS companies are even outperforming their US counterparts. An increase in engineering graduates, Internet users and government initiatives is expected to further support the growth, the report said.
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Bain & Company expected Indian SaaS companies to reach $30 billion in revenue by 2025 capturing 8-9% share of the global SaaS market.