How the Indian SaaS Ecosystem created ripples worldwide

Rajesh Narayanan
5 min readMay 30, 2021


India has been a significant contributor to IT growth in the past 2 decades. A SaaS can build, experiment, and test the product in the market with minimal human resources cost and maximal talent pool in India. Today, there are global Product Managers in India who are tasked with executing the big picture.

India has a high number of booming SaaS startups. There are more than 8000 such startups!

Chennai — The SaaS capital of India

The cost of talent in India and the cloud advantage paved way for the SaaS ecosystem in India. Zoho was the first, followed by Freshworks & Chargebee, all at Chennai. There are others from Chennai as well — Kissflow, PipeCandy, Klenty, Unmetric, Facilio, Hippo, Animaker, Happyfox, Fourkites, and Mad Street Den.

Chennai is the nerve of SaaS — it contributes about $1 billion in SaaS revenue apart from employing more than 10000 people in SaaS. It is estimated that the whole revenue of the Indian SaaS ecosystem is more than $1.5 billion, which means Chennai has the lion’s share.

Zoho and Freshworks have many products that help in running companies and managing businesses. Zoho reported revenue of more than $600 million during the FY 2020–2021. Freshworks reported $300 million in Annual Recurring Revenue(ARR), in 2020. Chargebee, with its subscription billing product that has an ARR of $50 million, turned a unicorn in April 2021.

Kissflow is Orangescape’s third product that was built entirely on revenue generated from the other two products. This business automation SaaS product from Chennai contributes an ARR of more than $10 million.

The Zoho Model

Zoho started as AdventNet way back in 1996 which is even before the IT boom in India. Later in 2009, it was renamed Zoho after the release of its online Office Suite.

Right from the initial product days, Zoho used Google for product discovery. It allowed potential customers to download a free trial. Before download details would be captured in a form. All downloads were counted as qualified leads and the sales process would begin through a call. This was Zoho’s earliest sales model.

“For 5–7 years, no other company smelt that model. Zoho had no competitors for a long time. Their marketing budget was very small. Now, even though everybody has woken up to Google Adwords and paid marketing has become very expensive, it is still attractive,” says Suresh Sambandham. “We should give full credit to Zoho for sowing the seeds of SaaS in India”, he adds. Zoho currently has about 20 million customers.

The Marketing and Selling advantage

Inbound Marketing and Inside Sales have contributed to the growth of SaaS in India. Companies in India like Zoho and Freshworks started selling to businesses in the US without meeting them physically. For Kissflow, physical meetings don’t take place even if the customer is in the same city or the sale value is high. Everything, including support, is done online.

The marketing teams take care of generating inbound interest(potential customers approaching the company) and routing the interest to a free trial or demo. Product positing according to different needs and product discovery is essential here.

Sales is the process of enriching a customer’s experience of the product by an explanation of comparison, pricing, support options, advantages, and various case studies and use cases. Salespeople give the finishing touch to convert leads. It is all about the perception of the product for the customer to get convinced rather than salespeople doing the push. Here, direct selling doesn’t take place. It is purely based on business interests.

Indian SaaS companies have capitalized on creating the first impression and onboarding process in the best way possible. For big-ticket enterprise sales, it can’t be done without a physical presence. Indian SaaS companies have overseas offices mainly for this purpose.

According to Suresh Sambandham, CEO of Kissflow, “Digital Marketing makes international selling easy if you’ve got the conviction”. Identifying the right product-market fit is crucial, before selling.

The Global Market for Indian SaaS

The SaaS companies in India have the most customers in the US, followed by other countries. The market for SaaS in India is much smaller when compared to other countries. Zoho has more than 250000 customers. Freshworks has more than 100000 customers.

80% of customers are SMBs and 20% are enterprises for Kissflow. 98% of their sales are through customers approaching them. The cost incurred in running in India is much lesser than in the US which makes it a great deal to get customers from the US, sitting in India.

There is more growth for SaaS when Small and Medium Businesses(SMBs) are targeted. “SMB-focused SaaS companies are flourishing given the vast and growing SMB market opportunity. SMBs accounted for 40 percent of global software spending in 2016, and that was up 10 percent to 50 in 2019. Indian heritage SaaS companies like Freshworks, Zoho, Kissflow, and Chargebee have built a strong SMB customer base across a number of countries by tapping into this opportunity,” according to Prabhav Kashyap, Associate Partner at Bain & Company.

Timeline of SaaS Unicorns based in India

Zoho was the very first SaaS unicorn and it achieved this without external funding.

Freshworks became the first SaaS unicorn that received global attention and good funding, in 2018.

Pune-based Icertis and Druva became unicorns in 2019.

Postman(Bangalore), Zenoti, and HighRadius (Hyderabad) followed in 2020 despite the Covid-19 pandemic.

Chargebee became a unicorn in 2021.

The Future of SaaS companies in India

Indian heritage SaaS companies will reach $18–20 billion in revenue and acquire 7–9 % of the global SaaS market by 2022 from 3–4 percent in 2019.

The pandemic has accelerated digital adoption, which will help SaaS grow by leaps and bounds. Despite Covid, investment in SaaS hasn’t stopped. The share of VC and equity investments rose from 15% in the first half of 2019 to 20% in the first half of 2020. The number of SaaS startups has nearly doubled in the last five years. Postman is a collaborative platform for API development, which turned a unicorn amidst an unpredicted pandemic.

According to a NASSCOM report, the SaaS market is projected to grow at 36% per annum and reach $3.3 billion by 2022. Of the 700 Indian SaaS companies making an ARR of $1 million in India, only 30 fall in the bracket of $10 to 50 million, while just 8 companies have an ARR of $50 million.

India is projected to have 2–3 $1 billion revenue SaaS companies within a few years, according to Arpan Sheth, Bain & Company.

There is one major challenge in Indian SaaS — getting Indian customers. Less awareness and high price sensitivity are major reasons. “Indian SaaS companies are trying to scale through specific initiatives like investments in market creation via freemium offerings, innovative monetization models, and clear articulation of benefits to the customer with a tangible return on investment metrics,” says Lalit Reddy, Partner at Bain & Company.

During a podcast by VC firm Accel, an industry expert said “In a SaaS business, once you cross $10 million with good momentum, you basically become unkillable because of the recurring nature of the business”, as quoted by Krish Subramanian, CEO and Co-founder of Chargebee.

The present is SaaS, future is more and more SaaS!