Why 2020 was a breakout year for SaaS

The Covid-19 pandemic pushed the world to become digitally connected at an unprecedented pace, driving the demand for software-as-a-service (SaaS) companies.

Case in point: US firm Zoom, which offers a video conferencing platform, witnessed a massive surge in demand as the pandemic broke and companies were forced to go remote. The platform continues to do well, having recorded over 350% year-on-year revenue growth in the past two quarters. 

Google Workspace, Microsoft 365, and Slack -- which was acquired by Salesforce in a $27.7 billion deal -- also witnessed an increased demand as work from home became the norm.

Read: Rewind 2020: How remote working changed cybersecurity needs in India

In India, the SaaS landscape faced uncertainty till June, when the country along with the US -- which accounts for two-thirds of the industry’s annual revenue -- were under lockdown. However, since the unlock, the segment recovered steadily on the back of the rapid shift to cloud-based software products.

According to a recent report from Bain & Co, there are 7,000-8,000 SaaS companies in the country as of December 10, 2020. Of the total, 1,200 firms raised capital, with more than 40 of them scooping up funds in growth-stage rounds. In fact, two of the growth-stage startups, Zenoti and Postman, turned unicorns in 2020.

Read: Rewind 2020: A shape shift in technology consumption

Here’s a timeline of all key developments that shaped the sector this year.

January

The beginning of an unexpected year for the SaaS segment was marked by the $90 million fundraise for Zinier, a San Francisco-based startup offering an AI-powered software solution to automate field service management. The fundraise brought the company, founded by Andrew Wolf and Arka Dhar in 2015, halfway to the unicorn status.

The month also saw Bizongo and Phenom People raise $30 million each, and logistics SaaS startup LogiNext scoop up $39 million. 

February 

Heritage SaaS company Freshworks made headlines with the acquisition of Bellevue, Washington-based AnsweriQ to expand the capabilities of its AI engine. 

Bengaluru-based Instamojo Technologies bought Times Internet-owned GetMeAShop, a software solution aimed at bringing businesses online.

The fundraises were led by Qure.ai, Hasura, and Esper, which raised $16 million, $9.9 million, and $7.6 million across their respective rounds. Fleet management software provider Fleetx.io, meanwhile, raised $2.8 million.

March

The pandemic had begun wreaking havoc across Europe and the US, and cases in India  had started to increase. 

Kolkata-based FusionCharts, which offers software solutions to convert data into visualizations, was acquired by Houston, Texas headquartered software systems company Idera. 

Mahendra Singh Dhoni-backed Khatabook also raised an undisclosed amount, while Fintso and Gyana raised $2.6 million and $3.9 million, respectively. 

Additionally, Zoho filed a lawsuit against Freshworks and its co-founders for building their company on the theft and misuse of its confidential business information, including trade secrets such as client data, software products and pricing strategy.

April

The month saw business activity come to a halt due to the lockdown, with only essential goods being delivered to customers. This led BigFoot Retail Solutions, which runs shipping software solutions provider Shiprocket, to start hyperlocal deliveries. 

The financial crunch stemming from the crisis led travel and hotel software solutions provider RateGain to send some of its employees on unpaid leave.

In the deals department, Autodesk bought a minority stake in Aurigo Software, which offers a range of SaaS solutions for companies in public infrastructure. Meanwhile, logistics management platform Fareye, travel management platform ITILITE Technologies, and cybersecurity solutions provider Indusface Consulting raised $23 million, $13 million, and $5 million, respectively.

May

Khatabook raised $60 million as part of a Series B round led by Facebook co-founder Eduardo Saverin’s B Capital Group, while contract management platform provider Sirion Labs announced a $44 million Series C fundraise from Tiger Global and Avatar Growth. 

Thiruvananthapuram headquartered AI and quantum computing solutions provider AIWare.ai was acquired by Cleareye.ai, a US firm offering AI-enabled services such as consumer experience sensing and insight generation. Freshworks appointed industry veteran Tyler Sloat as its CFO.

Santa Clara, California-based SaaS startup Clumio also launched an R&D centre in Bengaluru in May.

June

June saw the first SaaS unicorn of 2020 as API testing and development platform Postman raised $150 million Series C funding, reaching $2 billion in valuation. Additionally, enterprise automation firm JIFFY.ai raised $18 million, medical SaaS startup Healthplix scooped $6 million, and mapping solution provider Next Billion AI raised $7 million.

Moreover, Shiprocket promoted Akshay Gulati, its CBO, to the position of co-founder, and KFC Canada signed restaurant analytics startup Manthan for its digital transformation journey. 

July 

Jio launched a dedicated video conferencing solution called Jio Meet, Airtel debuted enterprise-grade video conferencing tool BlueJeans in partnership with Verizon, and Zoom announced the launch of its technology centre in Bengaluru.

Freshworks, meanwhile, sold a minority stake in its business to Steadview Capital for $85 million and application testing platform BrowserStack acquired San Francisco, California-based visual testing and review platform Percy. Travel tech platform Mystifly also raised $3.3 million in bridge funding.

August

Continuing its run, Freshworks reported surpassing $200 million ARR in the month of August. Additionally, Anchanto, Fareye and Verloop announced raising $12.1 million, $13 million, and $5 million, respectively, across separate rounds.

SaaS startup Hiver, which operated in shared inbox space earlier, also entered the helpdesk software market in the same month with the launch of its analytics platform ‘Analytics 2.0’. 

Bengaluru-based AxisRooms and Gurugram-based Piquor Technologies, which provide technology solutions for the hospitality sector, announced the decision to merge with Hotelogix to create a full-stack solution for the hotel industry.

September

The SaaS landscape was on the way to recovery. In fact, several startups in the category raised capital during the month, including Infilect, Squadstack, Rephrase.ai, BestDoc, Genietalk, Zuper, Zimyo, Customfit.ai, Sensehawk, and SignalX. Hasura led the group with a $25 million fundraise.

Homegrown work collaboration platform Flock also announced in September that its revenue grew 40% for three consecutive quarters, and Zoho rolled out an update, bringing new tools in the areas of contextual communication, social intranet and collaborative presenting and cloud document management.

October

Auto SaaS company Tekion, founded by former Tesla CIO and Indian origin entrepreneur Jay Vijayan, turned into a unicorn with a $150 million fundraise in October. The company is headquartered in California, but its development and research operations are largely based in India.

Additionally, subscription management firm Chargebee raised $55 million, followed by Slintel’s $4.2 million round, Hubilo’s $4.5 million round and FleetX’s $3.1 million round. 

Infibeam signed an agreement with Reliance Jio Platforms in the same month to provide the latter and its affiliates with enterprise ecommerce software and payments platform on a license model. 

Data management software company Commvault launched a centre of excellence in India.

November

Mindtickle made headlines with a $100 million growth round led by Softbank Vision Fund 2. 

Sales enablement platform Shipsy, ErpNext, Leena AI, PyxisPM, Netkar.ai, Turbohire, and Cashfree raised funds across separate rounds. 

ANSR Consulting acquired recruitment tech startup FastNext, Netcore Solutions bought product experience platform Hansel.io, Druva acquired SfApex, and London-based Kovai acquired Udaipur-based SaaS provider Cerebrata. MyGate also announced a partnership with Park+ to create an integrated RFID-based vehicle management solution for gated communities.

December

The last month of the year saw Zenoti, which provides a cloud-based software solution for salons and spas, enter the unicorn club with a $160 million fund-raise. 

Among others, sales automation platform LeadSquared announced a $32 million Series B fundraise, while application testing solution provider LambdaTest raised $6 million. Exotel and Pagarbook also closed rounds worth $5.4 million and $8 million, respectively.

Finally, Qure.ai announced a partnership with AstraZeneca for lung cancer diagnosis, Lucideous launched its SafeME cybersecurity assessment solution, and LogiNext announced a solution to manage Covid-19 vaccine supply chain in real-time.

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