Indian SaaS Industry Resilient Amidst Global Macro Conditions; Gen AI to Drive Transformation: SaaSBoomi and McKinsey Report

• ByStartupStory     |    July 28, 2023

A new report by SaaSBoomi, a community of over 3,000 founders, in partnership with consulting firm McKinsey, reveals that the Indian software-as-a-service (SaaS) ecosystem is poised for significant growth, with a projected revenue of $50-70 billion and an enterprise value aspiration of $0.5 trillion+ by 2030. The report highlights the resilience of the Indian SaaS industry amidst challenging global macro conditions, and the transformative impact of Generation AI (Gen AI) in shaping its future.

The report’s projections align with the lower end of the estimated value-creation opportunity of $500 billion to $1 trillion, as stated in its 2021 counterpart. Despite this, investments in Indian SaaS companies surged by 24% to $7.4 billion in 2022 from $5.9 billion the previous year, in contrast to a 20% decrease in global capital invested during the same period.

Manav Garg, Co-founder of Eka Software Solutions and Governing Council Member, SaaSBoomi, emphasized the long-term vision of the industry, saying, “Everybody is focused on the peak, but I would look at a 10-year horizon. In 2015, we were 40 companies. None of us could have imagined we would scale to this level as an ecosystem. There is real revenue growth, and with 75-80% gross margins, it’s a very healthy business.”

The report underscores the robust foundation on which the Indian SaaS ecosystem has been built and highlights its ability to withstand global headwinds. The investments in the sector demonstrate the confidence of investors in the growth potential of Indian SaaS companies.

Furthermore, the report emphasizes the pivotal role that Gen AI will play in driving transformation within the Indian SaaS industry. As the next generation of artificial intelligence emerges, it is set to revolutionize the SaaS landscape, leading to unprecedented growth and innovation.

The SaaSBoomi and McKinsey report offers insights into the dynamic and promising future of the Indian SaaS industry. The growth projections and investments demonstrate the industry’s resilience and potential to become a global leader in the technology domain.

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