Spotify Link: https://open.spotify.com/show/1YQdnQ50mmenzWVA2MBsQy
The several success stories of Zoho, Freshworks, Browserstack, Icertis who have all reached several hundred million dollars in ARR with most of their product built in India give proof points for the possibility to build large scale SaaS companies coming out of India.
Unlike the 90s when software was a one-time sale, the subscription nature of SaaS pricing ensures that the interests of the customer and the software vendor are well aligned. Today, there are over a hundred thousand software companies serving over two thousand categories with over five hundred billion dollars spent on software purchases. The SaaS industry is just one hundred fifty to two hundred billion dollars, so there’s another three hundred billion dollars of traditional on-prem software that needs to be replaced. Another opportunity exists in creating a product for the customers currently being served by custom software solutions built by the large IT services companies. At the same time, new industries are seeing digitization, creating more opportunities for building software.
In terms of liquidity as well, SaaS as a sector offers significant options- from an active M&A market and active interest from venture capital and private equity to fund growth to several examples of companies going public.
Krish ends by quoting Jason Lemkin, “In a SaaS business, once you cross $10M with good momentum, you basically become unkillable because of the recurring nature of the business”