How B2B SaaS is Spotlighting Indian Startup Ecosystem Since January 2023, at least 10 B2B SaaS companies have raised money monthly in India at various stages, according to Tracxn data. Despite having a solid number of deals in January and February, March saw the highest number of transactions.

By Sujata Sangwan

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Since the beginning of 2023, every month at least 10 B2B SaaS companies have raised funds in India across various stages. To start with raised USD 7 million in a pre-Series A funding and Darwinbox secured USD 5 million in an extension of a Series D investment round in January, followed by Freightify, Intangles and Venwiz which have raised USD 12 million, USD 10 million and USD 8.3 million respectively in Series A rounds in February. SpotDraft received Series A funding of USD 26 million and HealthPlix secured USD 22 million in a Series C round in March. In April, venture capital firm BoldCap raised USD 25 million to invest in early-stage B2B SaaS startups. In May, THB raised USD 20 million in growth equity to fuel its global expansion and innovation.

The Tracxn data showed that approximately 75 B2B SaaS companies with headquarters in India raised capital between January and May 2023, with 6 deals occurring in late-stage rounds (Series B, C & D) and the remainder taking place exclusively in early stages (Seed, pre-Series A & Series A). The highest disclosed cheque size was for USD 26 million, and the smallest was for around USD 50,000. Bengaluru was among the top cities which attracted the maximum number of deals (~30), followed by Delhi-NCR (13), Mumbai (7), Hyderabad (6) and Pune (5). Smaller cities like Surat, Jaipur, Bhopal, Meerut and Jhansi have also attracted investors with their B2B SaaS firms.

Despite having a solid number of deals in January and February, March saw the highest number of transactions (~20).

Raja Debnath, Managing Director and Co-founder of a B2B SaaS company Veefin Solutions believed that the COVID-19 pandemic has acted as a catalyst, driving increased adoption of cloud software platforms, including SaaS, across enterprises.

"The adaptability of SaaS providers offering more customizable and modular solutions like integrating with third-party tools and services has enhanced the value proposition of SaaS offerings. We will be seeing many India-based SaaS product companies catering to global markets and with this we will start seeing global product practices proliferate in the India market," he highlighted. "With the introduction of newer models like SCF (supply-chain finance) and embedded finance, the sector is expected to witness growth not only in the BFSI sector but also in the ecommerce sector."

According to BoldCap's General Partner Sathya Nellore Sampat, "As companies go through a painful process to layoff people, they will have lesser employees to solve for their growing customer needs and hence they will buy more software tools. We continue to remain bullish as enterprises continue to spend on software tools that are solving true pain points and we don't see that to change for the foreseeable future. We will be investing in 15-16 startups over the next 20 months."

The growth momentum

While the investment in Indian SaaS reached an all-time high of ~USD 5 billion in 2022, the space emerged as the third highest funded sector in Q1 2023 with USD 194 million funding. Additionally, the number of funded SaaS companies grew over 2x to 1600 in 2022, from 750 in 2017. The sector also enjoys a positive buyer sentiment with approximately 65 percent of enterprise software decision makers expecting to increase their 2023 software budgets, according to a recent analysis by Bain and Company.

Indian SaaS is capital efficient by default, said Thiyagarajan Maruthavanan, Partner at SaaS accelerator Upekkha. A recent survey conducted by EY and Upekkha titled "Bellwethers of Indian SaaS Report" showcased - 80% of the Indian SaaS startups have a burn multiple of less than 1.5x.

"For the Indian SaaS story, emerging technologies like AI and ML will serve as major development drivers. Through AI-powered "services," the AI transformation will most likely give India's digital companies with their biggest potential. This will have significantly superior margins of 40–50% even though it won't approach the 80% profit present "product companies" command. There, Indian companies have a definite competitive edge," Maruthavanan added.

Upekkha is on track to accelerate and fund 60 B2B SaaS startups this year.

Future prospects

Indian SaaS startups have shown exemplary resilience by continuing on a growth trajectory despite the current funding winter and market slowdown. The analysis by Bain and Company emphasised that the total annual recurring revenue (ARR) has been up four times over the past 5 years to USD 12 billion–USD 13 billion in 2022.

A report from E&Y also stated that one out of every three Indian companies in the B2B SaaS market are trailblazers and want to grow their ARR by more than 50% while burning very low cash. Additionally, the Bain and Company research showed that the domestic SaaS market in India has been expanding at a CAGR of 30 to 35 percent, as opposed to the US and UK markets' growth rates of 20 to 25 and 15 to 20 percent, respectively.

In fact, it is estimated that over the next 5 years, Indian SaaS companies will collectively reach ~USD 35 billion in ARR and capture ~8% of the global SaaS market.

Sujata is an engineering graduate and has done her Post Graduation in Human Resource Management. She has a deep interest in startups, venture capitalists & technology. She can be reached at

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