Indian Software-as-a-Service (SaaS) companies, which traditionally derived a larger share of their revenues from global markets, are now turning their focus to the domestic market, with revenue prospects improving here, industry experts Fe spoke to said.
For instance, Tally Solutions, a prominent accounting software provider, now derives 90% of its revenue from its 2.5 million paying customers in India. Tejas Goenka, managing director, said that the company expects a 30-40% growth rate in India this year. In FY23, Tally Solutions reported a revenue of Rs 550 crore, marking a 20% year-on-year growth.
Similarly, Haptik, an AI-based conversational chatbot solutions provider acquired by Reliance Jio in 2019, primarily focuses on India and surrounding regions, and posted a revenue of $11.6 million in FY23, maintaining a compound annual growth rate of 104% since FY16. On similar lines, Raptorise, a younger player, reports 25% quarter-over-quarter growth in both customer base and revenue, primarily from Indian clients.
Even global firms are now turning their focus to the Indian market. Salesforce reported $730 million revenue from India in FY23, growing at 50% year-over-year, while MongoDB is expected to reach $50 million from Indian operations by FY24, with a 50% year-over-year growth rate.
Brijesh Damodaran, partner at Auxano Capital, projects the Indian SaaS market to reach approximately $50 billion in annual recurring revenue (ARR) by 2030. “The Indian market has matured over the past decade, transitioning from being a big’ market in terms of population to a deep market with significant demand for specialised SaaS products across industries,” added Abhishek Prasad, managing partner at Cornerstone Venture Partners.
Success in the Indian market requires a different playbook, which these companies are effectively implementing. Aakrit Vaish, founder and CEO of Haptik, explains, “You need to invest time co-creating a solution with customers in a high-touch environment instead of just running return on investment numbers on Excel”. This approach has led to stronger customer relationships and more tailored solutions.
Companies are also adapting their pricing strategies to suit the Indian market. Kaushik Mukherjee, CEO of Raptorise, said, “We’ve implemented a value-based pricing strategy, charging based on the tangible ROI we deliver rather than just offering the lowest price”. This approach has helped companies overcome the perception of India as solely a price-sensitive market while building trust and long-term relationships with clients, despite being resource-intensive.
To address the challenge of payment collection, companies are proactively addressing payment terms early in the sales process. This approach, combined with a willingness to take action against repeat defaulters, has helped improve cash flow stability for many SaaS firms, experts said.
