In a report published in May 2016, NASSCOM had called Indian SaaS the next big thing. Several factors like cost effectiveness, low risk and greater flexibility were cited among the many reasons for the wide acceptance of SaaS. Major growth in the market was predicted by the year 2020 and well, we are here. The prediction has not gone wrong for the SaaS market has the potential to spur the next big growth story from the Indian market.
Even as uncertainty looms large over businesses worldwide, many entrepreneurs in Chennai have started a fresh journey exactly during this period. Srikrishnan Ganesan, co-founder of Rocketlane, tries to explain the trend. “Firstly, there are clearly some businesses that are experiencing acceleration in their growth and the right kind of tailwinds from the whole pandemic situation. Examples can be conferencing products (like Airmeet), web chat / messaging products for sales and support (like Freshchat), or e-learning companies and certain kinds of e-commerce. Secondly, there are new companies that are building products ground up with the knowledge that the world has changed in certain ways. This may be in established domains or in certain niches where they believe there is an opportunity to solve problems differently and in a better way for the new remote world,” he says.
Another reason that has spurred the SaaS start-up scene is the pandemic. Covid has derailed a lot of businesses but the SaaS industry surprisingly is on the rise in these times
The start-up ecosystem in Chennai has seen success stories like Zoho and Freshworks. Arvind Parthiban, CEO and co-founder, SuperOps.ai, believes that the start-up ecosystem is built around the success of such companies. “These are companies that encourage its employees to have an intrapreneurship mindset. It is obvious that people who have had that kind of intrapreneurship exposure within the company will come out and start-up on their own,” says Arvind. “Another reason that has spurred the SaaS start-up scene is the pandemic. Covid has derailed a lot of businesses but the SaaS industry surprisingly is on the rise in these times. The market is definitely changing but that does not mean there is no business to be done. Now is a safe time to build SaaS. The SaaS journey is a long one and it isn’t about instant results,” he explains.
The pandemic might have been coincidental in many cases, as many of them were in various stages of ideation even before. Siva Rajamani, co-founder and CEO of Everstage had been doing research for many months but the actual starting up happened during the pandemic. Like several organisations, his team is also placed in different cities at the moment. “SaaS start-up space is being understood well right now and there is interest among investors also to fund such ventures. But it is a great time to start -up because a lot of other SaaS companies have shown the way,” says Siva, who feels the ecosystem is maturing and globally, it is a huge growth area.
Being born in times of covid automatically means we have ended up hiring a team that is optimistic even in such times
For all you know, these stories have happened despite the pandemic. “There were people who already had a plan to start-up. I always wanted to start a company and the pandemic did not stop me and neither did the pandemic affect my decisions to hire a team or build a product. I simply chose to single-mindedly build a mission-critical product that can be sold during any situation. On the other hand, SaaS investments have considerably gone up. Investments have not declined; fundraising has not come down. Investors today, are safely betting on SaaS companies,” says Arvind.
Starting off during a pandemic comes with its set of expectations. After all, when the business environment globally has been largely dismal, the SaaS start-ups are preparing to be the job creators of the new world. “Being born in times of covid automatically means we have ended up hiring a team that is optimistic even in such times. We managed to build a team so far that knows that we are going to have to make the magic happen, and nothing is automatic, especially in these hard times. Also, perhaps it is easier for teams to stay positive in the ‘build’ phase of the journey, which is where we are,” says Srikrishnan.
We saw this growth happen with IT services 20 years back. Hopefully, the biggest SaaS companies will come from India in the coming years
In 2019, around $34 billion was invested in Indian start-up ecosystem and as on May 2020, an additional $17 billion has been invested. India is today the world’s third largest ecosystem for start-ups. Siva believes that the start-ups will play a crucial role in keeping some part of the employment going. “We saw this growth happen with IT services 20 years back. Hopefully, the biggest SaaS companies will come from India in the coming years.”
This story was published on October 2 in The Times of India