Indian SaaS Firms To Command 8% Of Global SaaS Market: Report
The report added that India's SaaS ecosystem has become a global leader, behind only the US in scale and maturity
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According to Bain & Company's India SaaS report 2022, homegrown software-as-a-service (SaaS) firms will command 8% of the SaaS market by 2027. It is expected to touch an annual revenue run rate (ARR) of $35 billion by 2027.
The report titled 'remaining steady through turbulence' stated that Indian SaaS companies are growing 20%-25% annually despite market headwinds. Indian companies' ARR of $12–$13 billion formed 5% of the global SaaS market in 2022, increasing four-fold in five years. India's SaaS ecosystem has become a global leader, behind only the US in scale and maturity, the report added.
"This ecosystem is being driven by a flywheel composed of SaaS companies who are successfully executing on their global ambitions and an investor base that believes in the potential of Indian SaaS. We are now seeing the emergence of a set of Indian SaaS companies who have a right to win not just in India, but globally," said Arpan Sheth, partner at Bain & Company and lead of the private equity and alternative investor practice in India, in a statement.
According to the report, the outlook for Indian SaaS investment remains broadly positive for the next 12 months. About 90% of Indian investors expect to increase or maintain their capital allocation to SaaS firms.
The co-author of the report and partner at Bain & Company, has also said in the statement that, "Indian SaaS has remained a comparative bright spot for early-stage investors in a VC market that saw a slowdown in 2022. Investors in Indian SaaS are excited by the opportunity to back companies across an array of SaaS sub-categories.
Moreover, the report said that buyer sentiment in SaaS will remain broadly positive going forward as well, with approximately 65% of enterprise software decision-makers expecting to increase their 2023 software budgets.