Indian SaaS start-ups secured 3X more funding in 2022 compared to 2019
The Indian SaaS industry’s resilience shines bright in the face of a stiff funding winter, defying expectations with a projected ~2.5X growth to reach US$26 billion in revenues by 2026.
According to “India SaaSonomics: Navigating Growth and Efficiency,” the latest edition of the India SaaS report, jointly done by Chiratae and Zinnov, Indian SaaS companies are doubling down on growth (revenue generation) while ensuring operational and capital efficiency.
Though concerns of a recession loom large, the Indian SaaS industry has displayed remarkable antifragility to withstand turbulent times.
Despite a widely acknowledged funding winter in the Indian start-up ecosystem, seed-stage funding witnessed a 1.5X increase, while early-stage funding experienced a notable 1.6X surge in value during 2022.
In fact, Indian SaaS start-ups secured 3X more funding in 2022 compared to 2019, demonstrating a steady CAGR of 47%.
However, the decline in SaaS company valuations in the public markets has greatly affected private markets, driving down late-stage funding. But stable deal volumes in Q1 2023 indicate that the funding slowdown for Indian SaaS companies has bottomed out, signalling a gradual recovery to look forward to in the upcoming quarters.
In a recent survey by Chiratae Ventures and Zinnov, an overwhelming 93% of the founders surveyed, anticipate an increase in revenues in the next 12 months. Amidst the wariness of global macro-economic headwinds, 9 out of 10 investors continue to believe in the India advantage and are betting on existing and newer growth areas.
While the world and India – to some extent – witnessed layoffs, 96% of the Indian SaaS unicorns and potential unicorns grew their headcount throughout 2022.
In a remarkable contrast, US tech start-ups announced 3X higher layoffs than their Indian tech counterparts between January 2022 and March 2023.
The India advantage also extends to key opportunity areas – DevOps, Cybersecurity, and Vertical SaaS – which will lead the next phase of growth and innovation across SaaS categories. Fiinews.com
