Indian SaaS companies to be valued at $50 billion by 2025: Google

Indian startups offering software-as-a-service could grab a major share of revenue generated by global SaaS industry which is expected to reach USD 132 billion by 2020.

According to a joint report released by Google and venture firm Accel Partners, Indian SaaS companies will be valued at USD 50 billion by 2025.

The report outlines that purpose built global SaaS products will see hyper growth and adoption by small and medium-sized businesses(SMBs) contributing to more than 75 percent public cloud revenues driving the global SaaS industry to USD 132B revenues by 2020, of which SMB SaaS is expected to reach USD 76B.

With the demand from SMBs in United States projected to double, and an expected explosion of demand from Europe, Indian startups have the opportunity to grab 8 percent of this revenue by creating purpose built innovative solutions targeted at SMBs globally.

In a market with demand fulfillment largely led by US, India’s competitive advantages will help Indian SaaS companies see strong growth and create USD 50 Billion in value over the next 10 years.

“We’re already seeing many Indian SaaS startups creating world-class products successfully for global SMB market,” said, Shekhar Kirani, Partner at Accel in India, adding that of the 125 startups Accel has invested in, about 25 percent are SaaS enterprises. “With sizable SMB market opportunity, increasingly high quality entrepreneurs, availability of local talent, favorable unit economics and a vibrant VC community in this space we anticipate several billion dollar companies will be create from India in the next decade,” Kirani said.

The report projects that with India’s advantages in engineering, inside sales, product

management and mobile skill set creates a highly advantageous opportunity for Indian SaaS businesses to be profitable and scale quickly.

Analyzing global demand for SaaS, based on number of searches on Google by region, U.S. has highest demand at 37 percent, followed by Europe at 26 percent, India with 12 percent and rest of the world at 25 percent.

On the fulfillment side, U.S. dominates the fulfillment landscape with 70 percent share of the total demand fulfillment, Europe with 20 percent and India fulfilling 5 percent share of SaaS demand.