What Draws Investors To SaaS-Based Products? Bengaluru-Based HR Solution Provider Has The Answers! A successful SaaS product should have certain inherent characteristics such as modularity, efficiency, security & reliability
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Software as a Service (SaaS)-based products have taken the startup ecosystem by storm. From logistics, payroll, customer care, every application today can be fine tuned using this technology.
Founded by Girish Rowjee and Sayeed Anjum, Greytip is primarily focused on serving small businesses. Bengaluru-based startup not only provides software solutions for HR and payroll departments but also assists in hassle-free and accurate statutory compliance.
Speaking to Entrepreneur Media, Girish spoke about the essential qualities that go into the making of a successful SaaS-based product.
What helps draw investors' attention to SaaS-based models ?
Greytip recently grabbed 35 crore in Series B funding from New Enterprise Associates and Blume Ventures, amid a season of drying funding environment.
Investors tend to generally look at these elements when investing in a SaaS business:
- Is the addressable market large enough? In case the existing local market is not sufficient, can the organizations tap into an overseas market?
- Can the flagship product be seen valuable enough to win the clients? Also, can the relationship with the client be deepened by solving additional problems for them so that the revenues from each client can increase.
- Can business scale at 8-10% monthly growth for at least a few years? Can the business reach a USD 50 million topline?
- Can the business acquire customers in a sustainable model?
- What are the constraints to the business model and growth?
- How big is the competition? What is the significant differentiation of the company vis-a-vis the competition?
- What prevents another organization to come-up with something similar or slightly better or at a lower rate? How will the company handle this situation?
- Is there something that can completely disrupt the model for the company?
- How will collections happen and what are the challenges in that area?
What are the key requisites for a SaaS-based model ?
"The primary requisite is an intense customer orientation and responsiveness. Customers are very demanding and expect high relevance of the solution to their requirement, reliability, accuracy, performance and server up-time. Of course, like any other service industry, delivering high customer satisfaction is crucial to the success of the business.
SaaS enables these expectations in an efficient manner. A successful SaaS product should have certain inherent characteristics, such as modularity, efficiency, security & reliability, for an optimal cloud-based deployment. A loosely-coupled stateless design ensures the application scales well to respond to elasticity of demand. Because SaaS allows for hassle-free upgrades, we are able to focus more on customer-led innovation than traditional companies.
Our customers also entrust us with confidential data for a mission-critical task that needs to be run periodically. The high levels of security, fault-tolerance and disaster recovery offered by Amazon Web Services serve as an added assurance to our customers.
Another crucial aspect is to ensure that you have the right pricing for the customer segment that you intend to address. You will need to quickly determine what works and what does not."
Greytip's current clientele comprises of a mix of small & mid-market businesses as well as large enterprises across India and the Middle East.
"We are planning and executing growth strategies that will help us consolidate significantly in the next two years. We have a three-pronged strategy that focuses on enhancing our market penetration in Tier 1 and Tier 2 cities, driving geographic expansion and shipping out differentiated products that serve the needs of customer segments better," Girish said.
From a volume perspective, the company anticipates to grow from 3,500 customers to at least 10,000 customers in the next 18 to 24 months.
Greytip is primarily focused on serving small businesses. It not only provides software solutions for HR and payroll departments but also assists in hassle-free and accurate statutory compliance.
