The fastest growing technology model through the last decade, Software-as-a-Service or SaaS is showing unprecedented valuations and unwavering tenacity that will dominate the next few decades!
Cloud computing solutions, operating on Software-as-a-Service (SaaS) models, are driving the global GDP growth, and are expected to hold the majority share of enterprise software by 2025. In fact, the public cloud software market is up 10x since 2013, with a staggering 37% CAGR.
Most SaaS businesses are B2B propositions targeting Enterprises as customers – what we refer to as Enterprise SaaS. They offer unmatched valuations – typically valued at multiples of revenues, notable examples include Zoom (~27X multiple), Shopify (~40X multiple), ServiceNow (~18X multiple). Not to miss Slack, acquired by Salesforce at a ~30X multiple!
Even through 2020, a year of global pandemic, which devastated every major economy in the world and capsized several industries, Enterprise SaaS businesses have driven global stock markets to life-time highs – delivering a 110% growth in just 3 months!
This unique business model, which is highly scalable, self-sustaining, and built to last, typically addresses the core business processes in an industry, thus creating incredible value for all stakeholders involved.
Win Sticky Customers
Achieve Rapid Scale
Capital Efficient Growth
Achieve Higher IRRs
Capital For Growth Funding
Expanding Multiples with Scale
So where do Indian Enterprise SaaS companies stand today? We have only a handful to talk about - Freshworks, Zoho, Druva, and Incertis, all four of which have crossed a $100 million+ in ARR and surpassed valuations of $1 bn+.
Indian companies are expected to capture upto 9% share of the global Enterprise SaaS market by 2022, translating into a revenue opportunity of US$ 18-20 billion. It is estimated that about 50 to 60 Indian companies have achieved revenues of US$ 10 million or more – a small number in comparison to mature markets like the US & Europe. For India this is a massive opportunity waiting to be unlocked!
We exclusively invest in Enterprise SaaS models and our portfolio companies illustrate how these attributes of Enterprise SaaS create unmatched outcomes.