Bain - India SaaS Report 2022

The Indian Software-as-a-Service (SaaS) ecosystem is continuing to gather momentum and has become a global leader behind only the US in scale and maturity. The total annual recurring revenue (ARR) of Indian SaaS is expected to reach $12 billion-$13 billion in 2022, which is four times more than it was five years ago. Investment in Indian SaaS is also expected to reach around $5 billion in 2022, which is six times more than it was in the past. The growth of Indian SaaS is driven by a mutually reinforcing flywheel of SaaS companies and investors, with a proliferation of new SaaS companies with proven growth models, supported by investors who are allocating increased capital to Indian SaaS across stages. Indian SaaS companies are being founded in record numbers and are proving they have a right to win in the global market. This has led to an all-time high of investment in Indian SaaS in 2022, but the momentum slowed in the second half of the year. Despite this slowdown, proven revenue growth combined with attractive margins has made SaaS a comparative bulwark for investors, with Indian SaaS venture capital investment up 10% over the first three quarters of 2022. Investors in Indian SaaS benefit from an opportunity to back a wide array of companies across sub-categories and have a clear path to realization, with around 40 SaaS exits in 2022. Growth remains at the top of the agenda for Indian SaaS companies, with new market entry enabled by effective enterprise go-to-market strategies.