The Indian Software-as-a-Service (SaaS) sector is projected to reach $50 billion by 2030, with a possibility of an upward revision given the rapid advancements in AI and its integration into SaaS solutions, said a report.
The report titled “The Rise of SaaS in India 2024” by Bessemer Venture Partners also added that the Indian SaaS sector is set to undergo a major transformation driven by the rapid adoption of Artificial Intelligence (AI), increasing focus on cybersecurity, and increasing cloud adoption in the banking, financial services, and insurance (BFSI) and manufacturing industries.
According to the report, the Indian startup ecosystem is set to attract $1 billion in new venture funding in 2024, which will be 25 per cent higher compared to last year. A significant portion of this investment, the report says, will be directed towards AI-focused companies.
The survey findings reveal that around 60 per cent of startups, previously pure SaaS companies, are now evolving into AI-enabled SaaS providers.
“2024 is the year artificial intelligence goes mainstream, marking a pivotal shift from emerging technology to a cornerstone of business and industrial operations. AI is the next revolution in software, and we expect all software to transition to AI native, AI enabled, or AI infused in some way over the coming months. India is also in a unique position with its large base of AI developers and global leadership in business and professional services,” said Anant Vidur Puri, Partner, Bessemer Venture Partners.
During the year 2023, Indian SaaS unicorns and centaurs collectively added $5.9 billion in revenue, said the report.
While wealth-tech software and industrial-tech software were key sunrise sectors in SaaS spurred on by increasing equity participation and push towards Make in India and sustainable operations, cybersecurity was another area which saw great interest across firms, according to the findings.
Amongst the surveyed organisations, 99 per cent of firms in India said that they plan to increase their cyber budgets, with half of them anticipating a 6-15 per cent rise.
Further, cyber insurance as a sector is projected to grow to 50 per cent year-on-year (Y-o-Y) over the next five years to reach the $800 million mark by 2030.
“In addition to AI, we believe cybersecurity, wealth tech, and industrial software are three other key trends that will lead the next leg of software growth in India. We’re particularly excited about cybersecurity as this is a domain in which India has rapidly growing skilled talent and a potential to serve a large domestic as well as global market,” Puri added.
First Published: Aug 05 2024 | 8:38 PM IST
