Despite a present slowdown caused by intense macroeconomic pressure and a severe financial winter, the Indian Software-as-a-Service (SaaS) business is expected to grow by 2.5X to achieve a revenue of $26 billion by the end of 2026.

 

“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.

 

As per the survey, Indian SaaS companies are focusing more on expansion (revenue creation) while maintaining operational and financial efficiency. In 2022, Indian SaaS equity funding increased by 30% to $419 million with 2,780 deals, compared to 2,605 agreements and $319 million in funding in 2021.

 

The report noted that early-stage investment saw a significant 1.6X rise in value during 2022, despite what has been widely recognised as a funding winter in the Indian start-up ecosystem. In fact, Indian SaaS start-ups received three times as much capital in 2022 as they did in 2019, showing a consistent CAGR of 47%.

 

“However, the decline in SaaS company valuations in the public markets has greatly affected private markets, driving down late-stage funding,” according to sources.