Indian SaaS market to hit $37 billion by 2028

As the global software landscape evolves, Indian software-as-a-service (SaaS) startups are increasingly setting their sights on international markets, with a report from advisory firm 1Lattice and venture investor Sorin Investments projecting the global market share of Indian SaaS products to reach 8% by 2028. Currently valued at $12 billion, the Indian SaaS market is expected to burgeon to $37 billion in the next four years, a significant leap that underscores the sector’s growing prominence on the world stage.

Shift in Strategy Amid Economic Adjustments
Despite maintaining its global market share at 6% since 2022, the journey has not been without its challenges for Indian SaaS companies. The broader correction in global macroeconomics has led large enterprises to slash their SaaS budgets, presenting a roadblock to the anticipated growth. This situation is further exacerbated by a funding slowdown, extending the gestation period for SaaS startups to achieve product-market fit and finalize sales. According to Sorin Investments, reaching $100 million in annual recurring revenues (ARR) now takes an average of six to seven years, a timeline that reflects the current economic cautiousness.

From Rapid Growth to Sustainable Development
In response to these challenges, Indian SaaS companies are pivoting from the rapid-growth mindset fueled by abundant capital to a more sustainable, efficiency-first approach. This includes a strategic focus on go-to-market (GTM) functions and a reduction in workforce numbers to conserve resources. The integration of AI technologies is also playing a pivotal role in this shift, enabling companies to enhance customer experiences and operational efficiency without the heavy reliance on capital-intensive marketing strategies. This transition is indicative of a broader industry trend towards content-based marketing and organic growth, aligning with the current economic climate.

AI and the Future of Indian SaaS
The incorporation of artificial intelligence (AI) into product suites is becoming a significant focus for Indian SaaS providers, aimed at driving both innovation and efficiency. With nearly 15-20% of the global AI workforce based in India, the country is poised to become a key player in AI-driven SaaS solutions. This talent base, coupled with initiatives to integrate AI into mainstream educational curriculums, suggests a promising future for the Indian SaaS sector, both in terms of product development and global market share expansion.

As the Indian SaaS landscape navigates these shifts, the focus on efficiency, customer experience, and AI integration heralds a new era of growth and innovation. While the path to expanding global market share may be more gradual and measured than before, the foundation being laid by these strategic adjustments promises not only resilience but also a stronger, more sustainable position in the global SaaS ecosystem. BNN Breaking