THE SAAS PLAYBOOK

DESPITE RECENT FUNDING SLOWDOWNS, INDIA'S SAAS MARKET IS EXPECTED TO GROW AT A CAGR OF 15-18% TO SURPASS $50 BILLION IN ANNUAL RECURRING REVENUE BY 2030 AS AI AND GEN AI DRIVE INNOVATION AND INVESTMENTS. WITH A GROWING START-UP ECOSYSTEM, INDIA MAY LEAD ON THIS FRONT

- PALAK AGARWAL

AT YOUR SERVICE

• India's SaaS market is likely to surpass $50 billion in annual recurring revenue by 2030; combination of AI and Gen AI offers a big growth opportunity

• VC investments have slowed in the past two years due to a shift towards fundamental evaluations over market share and Al-driven solutions. But, stakeholders say investments are rising

• VCs are increasingly selective, investing in SaaS companies that leverage AI and have robust business models, while seed investments remain active

• Faster Gen AI integration in SaaS will open up new opportunities, propelling the sector towards real-world problem-solving with advanced AI

FOR MANY BUSINESSES hit hard during the pandemic, SaaS was the knight in shining armour. SaaS, which stands for software-as-a-service, cloud-based with its infrastructure has revolutionised business operations in the past few years.

According to a report by Bessemer Venture Partners, a venture capital firm specialising in technology-led companies, India's SaaS market is on course to surpass $50 billion in annual recurring revenue (ARR)-projected earnings by way of subscriptions by 2030.

SaaS represents a form of cloud computing where companies offer clients access to application software while managing all underlying physical and software resources. This model not only streamlines operations but also reduces costs and increases scaleability for businesses. How is it different from plain-vanilla software? The simplest explanation is that instead of buying a software solution upfront and running it on premises, a business buys a subscription, which allows them to run the software on the cloud, where all the computing takes place. All that the client needs is a front-end, which could be just a browser.