Indian SaaS players set to clock $35 bn ARR by 2027: Report
Currently, 14 out of the total 1,600 SaaS companies in India that have received funding in the last 5 years clock annual recurring revenues of over $100 million, up from about five in 2020..
According to Bain & Company’s India SaaS Report 2022, homegrown SaaS firms commanded a $12-13 billion ARR as of last year, and are expected to grow at an annualized rate of 20-25% through 2027. This translates into a 3x jump over the next five years, compared to 2022.
Currently, 14 out of the total 1,600 SaaS companies in India that have received funding in the last 5 years clock annual recurring revenues of over $100 million, up from about five in 2020.
India becomes the second-largest SaaS ecosystem globally; what’s driving this growth?
The total annual recurring revenue (ARR) of Indian SaaS firms has grown four times to $12–$13 billion in 2022, while investments into this sector has risen six times to $5 billion over the past five years.
New-age Indian SaaS companies like Innovaccer have reached $100 million ARR in just 6–7 years while early entrants like Zoho have achieved more than $1 billion in ARR. About 14-16 Indian SaaS companies are in the $50-100 million ARR stage currently; 20-25 in $20-50 million range and 30-35 in $10-20 million range.
The report estimates Indian SaaS companies to grow 20-25 per cent per annum to reach approximately $35 billion in ARR and capture about 8 per cent of the global SaaS market by 2027.
“The US remains the largest SaaS ecosystem, followed by India. Subsequently the UK and Israel are other key SaaS ecosystems. When we think of market size, as our report suggests, markets such as the US and UK are larger, however Indian SaaS companies are going after global SaaS end-markets,” Ericson said.
The number of funded SaaS companies grew over 2x to 1600 in 2022, from 750 in 2017. The study finds that 14 of the 1600 companies that have now been funded over the past five years in India have exceeded $100 million in ARR (compared to around 5 in 2020) and are reaching this growth milestone as quickly as their US counterparts.
As Per the report by Business Today dated on 25th Jan 2023
Credits: This full report is published by Business Today