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India’s SaaS industry to generate over $50bn in revenue, create 500k jobs by 2030: Report

India’s SaaS industry to generate over $50bn in revenue, create 500k jobs by 2030: Report
Photo Credit: Pixabay
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The Indian software-as-a-service (SaaS) ecosystem is likely to achieve $50-70 billion in revenue by 2030, while creating 500,000 jobs. The innovation is expected to be driven by innovation in generative artificial intelligence, as the industry moves from SaaS to SaaS.ai, a report by industry body SaaSBOOMi’s latest report, created in partnership with Mckinsey, found. The report also projected more than $500 billion value-creation opportunity for the Indian SaaS ecosystem, down from $1 trillion estimated in the 2021 report.

The report also stated that while overall capital investment in software declined by 20% from 2021 to 2022 in the backdrop of global macroeconomic conditions, for India the investment in software and SaaS increased by 25%.

“India holds a structural advantage in talent, cost, and expertise, making it a potential global peer in the SaaS market. SaaS companies in India can operate with lower sales/marketing investment, R&D intensity, and better payback periods compared to their global counterparts. However, only a few SaaS players in India have fully leveraged this advantage, thus far,” the report added. 

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The number of SaaS companies has increased from 40 in 2015 to over 3,500 in 2023. Tier-2 and -3 cities have also seen a huge uptick in the emergence of these companies. Manav Garg, Co-founder of Eka Software Solutions and governing council member, SaaSBOOMi, said that cities like Surat, Nagpur, and Bhopal are emerging hotspots. Additionally, there has been a three-fold increase in the companies with more than $50 million in annual recurring revenue (ARR).

Going forward, generative AI is expected to play a major role. Over 60 generative AI domains across horizontal, vertical, and developer SaaS tools have emerged. Internally too, companies are reporting up to 40% increase in internal productivity with the adoption of AI.

Garg’s venture capital firm Together Fund announced a $150 million early-stage fund for AI companies. This is the firm’s second fund; the first one was announced in 2021 that has backed about 20 SaaS companies.

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To be sure, India ranked fifth in terms of investments received by AI startups, last year, as reported by Stanford University’s annual AI Index report in April. At $3.24 billion in investment in 2022, India was placed ahead of countries like South Korea, Germany, Australia, and Canada.


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