B2B SaaS Startups Have Lucrative Opportunities For Growth Within the Homeland
While Saas 1.0 and 2.0 was about Indian Saas companies building globally competitive SaaS products for markets outside India, the new era of SaaS is about startups serving Indian consumer's software needs
Out of the 21 startups that have turned unicorns so far this year, 9 are in the B2B SaaS space. There can’t be a better time for B2B SaaS startup founders in India. The pandemic has not just pushed adoption of digital technologies but has also been a major driver for growth of SaaS platforms, simply because of the benefits it offers to businesses in terms of scale, functionality and remote productivity.
And while Saas 1.0 and 2.0 was about Indian Saas companies building globally competitive SaaS products for markets outside India, the new era of SaaS is about startups serving Indian consumer’s software needs. There are several things going in favour of this new SaaS revolution: great founders, vast amount of tech talent, interested VCs and other ecosystem enablers. A reason why number of Saas companies has almost doubled, even as the market size has zoomed five times.
For a country known for its services exports, it’s a huge shot in the arm for India’s tech powerhouse recognition and will boost product innovation. As per a report by VC fund Chiratae and research firm Zinnov, market value of Saas is expected to surpass that of IT services by 2025-30.
This surge in adoption of SaaS-based platforms is further driven by the enhanced Internet and smartphone penetration, increased investment in digital infrastructure development, a rise in consumer spending, and the availability of cloud platforms at competitive prices.
Demand for SaaS innovation got a tremendous boost amid the COVID-19 pandemic which caused challenges and uncertainties for businesses worldwide. It forced small- and medium-sized businesses (SMBs) to fast-track digital transformation which ultimately helped them to survive the pandemic. The SMB segment of the global SaaS market is expected to outgrow the enterprise SaaS market by 2020. The SMB segment is underpenetrated and has substantial revenue potential.
According to a report by Google & KPMG in July 2018, “The global SMB SaaS segment is expected to grow at a CAGR of 36 per cent over the 2017-22 period.”
SaaS platforms provided SMBs with cost-effective and efficient solutions to accelerate the shift of moving services to the cloud or integrating software to the business. Further, features that enable greater customer focus, fast decision-making, and cost-effectiveness fuelled the growth of SaaS. Not to mention modest maintenance, implementation costs, and security risks that make its adoptions an appealing prospect.
While the developments are notable, SaaS-based platforms still have a long way to go. Experts are of the opinion that the next few years will be crucial for the growth of SaaS-based tech startups in the country as digital adoption accelerates, market open-up and the ongoing trend of fast-tracking digital adoption by organizations particularly small and medium businesses gathers pace.
India has already made a name for itself as the world's leading outsourcing destination for global companies, especially in the technology sector. Now in the Fourth Industrial Revolution, it is imperative for the country to reinvent itself and realize its unmatched potential to become the world's next Silicon Valley. Towards this, we need to bring the ecosystem together to help the Indian tech startups to survive and thrive making 2021 a great year for them.
To maintain this momentum, we need to further improve government regulations to encourage support for technological innovation, train tech talent, and incentivize them to stay in the country. This will improve the risk profile of the country and help in attracting institutional investment in technology to enable revenue generation for startups, both from domestic as well as global markets. Additionally, there is a need to increase seed-stage investment options for start-ups besides boosting corporate participation in the startup ecosystem in India in line with competitive global ecosystems.
India has over 50 million SMBs, spread over 100 types of businesses like kirana store owners, mobile recharge shops, medical stores and apparel, among others. These merchants are exploring digital solutions more than ever before due to their role in making business tasks simpler, digitized, and secure. This bodes well for the SaaS-based digital start-up segment in the country and will form the crux of increased demand for such solutions going forward.
Infact within the SaaS umbrella, SMB Saas could be one of the strongest segments with use cases as diverse as inventory management, HRM, marketing tools and customer engagement.
We see this trend going up significantly in the coming years where even a normal businessman is curious about learning and trying out solutions that help him leverage technology towards business objectives. We believe that this will write the story of the growth of the digital business solutions segment in the coming decade. Also, the growing interest of large corporates and VCs in empowering the burgeoning SaaS startup ecosystem is a positive development. Entrepreneurs must use this opportunity to drive acceptance for SaaS in the industry to drive fundamental business processes.
The rise of tech startups without a doubt is one of the most enduring legacies of India’s technology revolution. The startup ecosystem in India has the potential to cater to the diverse requirements of business enterprises in India. They have everything required to expand into larger businesses.
With communities such as SaasBoomi and Nasscom, and the hustle of Indian founders, the B2B landscape is set to witness many more unicorns in the days to come. That’s why when Hans Tung, managing partner at GGV capital, says that India’s unicorn list will have more software startups than China, he is absolutely bang on.
A young and dynamic serial entrepreneur, Harsh Pokharna is the Co-founder and CEO of OkCredit, a leading credit-based bookkeeping application for Indian MSMEs. Under his role, he spearheads end-to-end business operations with a strong focus on growth, fundraising, and hiring.
Harsh is a Mechanical Engineering graduate from IIT Kanpur. An inherent leader, Harsh served as the Cultural Secretary of HALL 5 in college and solicited Rs. 1.8 lakh after taking charge, a direct 50% growth in funds. He also helped in minimizing the electricity and food wastage in college and won IIT Kanpur's Energy Championship Award. Simultaneously, he started the IIT-Kanpur Chapter of 'Students in Free Enterprise' and became its President.
Harsh built a team of 30 students from the scratch, drove positive initiativesin-house and outdoors, and collaborated with prominent players including KPMG and ShikshaSopan (led by Prof. H. C. Verma).
Following his graduation, Harsh was associated with a number of eminent companies including Intel Corporation, Flipkart, and Reliance Payment Solutions Limited (JioMoney). In 2015, he started his entrepreneurial journeywith his college friends Gaurav Kumar and Aditya Prasad by launching ClanOut, a social discovery platform. He also co-organized blockchain-centric meetups in Bangalore to develop a strong ecosystem locally. This was followed by a series of blockchain development and consultancy projects and, ultimately, took shape as Psi Phi, a platform that analyzed blockchain applications and developed prototype.
In April 2017, he conceptualized OkCredit with Gaurav and Aditya and launched the application in November 2017. Within XXmonths/years, the platform gained XX active users through word of mouth publicity and received backing of prominent global industry players including Y Combinator and Tiger Global.
Through OkCredit, Harsh envisions driving digital enablement towards the Indian MSMEs while also improving their cash flow through tech-driven services.