A recent survey reveals a staggering statistic: nearly 92% of software-as-a-service (SaaS) startups in India have integrated artificial intelligence (AI) features into their products over the past year. This phenomenon underscores the rapid adoption of AI across the sector, with 87% of these companies now identifying as either AI-native or AI-enabled. The report, titled “The Rise of SaaS in India 2024,” surveyed around 100 SaaS startups with annual recurring revenue (ARR) between $3 million and $200 million.
It projects that Indian SaaS centaurs (companies with $100 million in ARR) and unicorns (companies valued at over $1 billion) will generate between $20 billion and $25 billion in revenue by 2030. India-first companies such as Perfios, Bill Desk, and Razorpay are expected to achieve a collective ARR of $5 billion by 2023. Meanwhile, global-first players like Zoho, Amagi, and Icertis are on track to reach an ARR of approximately $17 billion in the same period.
In 2023 alone, these unicorns and centaurs added $5.9 billion in revenue.
ai boosting India’s SaaS industry
The report highlights the substantial growth potential for Indian SaaS companies, driven by AI-powered innovations.
As AI technology advances, Indian entrepreneurs are well-positioned not just to meet but exceed the forecasted revenue figures, potentially driving unprecedented growth in the region’s cloud economy. However, the increasing integration of AI has also heightened cybersecurity risks. The report notes a significant surge in domestic consumption of cybersecurity software and services, which reached $6 billion in 2023, up from $3.4 billion in 2021.
The number of cybersecurity professionals in India has tripled over the past three years to around 300,000, with most companies planning to increase their cybersecurity budgets by 6% to 15% in the next 12 months. The report anticipates the rise of dominant players in AI software, AI-enabled services, domestic cybersecurity, wealth management software, and Industry 5.0 solutions. These companies are expected to cater to the growing domestic market and compete globally, solidifying India’s position as a leading technology powerhouse.
As Indian SaaS companies continue to innovate and integrate AI, the industry is set for remarkable growth, making the region a hotbed for technological advancements and economic opportunities.
