The Great AI Push - India's SaaS to Hit $50 Billion Mark by 2030

In a welcoming news, India’s Software-as-a-Service (SaaS) sector is inching towards enormous growth. According to a report published by venture capital firm Bessemer Venture Partners (BVP), the SaaS industry will hit the USD 50 billion mark by 2030.

The report titled "The Rise of SaaS in India" underlines the metamorphic role of artificial intelligence (AI) in propelling this evolution, indicating that AI-enabled SaaS solutions will be at the forefront of the industry's growth. The report defines the growth trajectory, indicating that the Indian SaaS market could presumably triple its revenue in the next six years, all thanks to the rapid integration of AI, the shift towards cloud adoption, and the increased focus on cybersecurity.

In India's ever-evolving SaaS ecosystem, AI and efficiency continue to shape the critical drivers of cloud growth across the country. The SaaS industry is treading on a growth path, and previous projections reflect this. Earlier, Bessemer Venture Partners (BVP) had projected that the sector would grow from USD 13 billion in 2022 to USD 25 billion by 2025.

Transforming the SaaS Industry with AI Integration

Businesses, including 60 per cent of startups that previously operated on a pure SaaS model, are now upgrading their capabilities as SaaS providers with AI capabilities. The key to the transformative rise of the SaaS industry lies in the integration of AI, which has revolutionised this sector in the last decade.

Businesses that have leveraged AI's power can deliver enhanced customer value and boost operational efficiency. AI's capability to analyse extensive data, optimise business strategies, and personalise customer experiences will help the SaaS industry achieve phenomenal growth.

Industry experts believe AI is propelling the next wave of software revolution, with software metamorphosing into AI-native, AI-enabled, or AI-infused.

Narendra Kumar, co-founder of Corpbiz, shed light on AI integration in the SaaS industry. “As we witness the remarkable growth trajectory of the SaaS Industry in India, driven by AI integration, businesses in the current scenario are transforming the way they operate. We assist business enthusiasts willing to start their SaaS business in India through our business registration consulting services. With a network of 10,000+ professionals, we are empowering entrepreneurs in every possible way. We receive 100+ queries daily for company registration. Thanks to our dedicated team at Corpbiz, who never disappoint clients in terms of service and support. The infusion of AI into SaaS has become a game changer, enabling businesses to deliver greater customer value." Narendra Kumar said.

India’s SaaS Growth Fueled by Cybersecurity and AI Talent

India has a pool of AI talent and leadership in business services, which adds to the country's significance in capturing a plum market share. The country is undoubtedly positioned to grab this opportunity to fuel unprecedented growth.

Apart from cloud adoption, an intensified focus on cybersecurity is another key factor fuelling the growth of India's SaaS sector. Banking, financial services, insurance (BFSI), and manufacturing are some industries actively leveraging penetration into new markets and serving dynamic business needs.

As companies rapidly shift toward digital transformation, cloud solutions are becoming essential to businesses striving for agility and scalability. The evolution is marked by the businesses' focus on cybersecurity by Indian entrepreneurs owing to their heavy dependence on digital platforms, exposing them to online cyber threats.

According to reports, the Indian Cybersecurity market, valued at USD 6 billion in 2023, is anticipated to double to USD 13.6 billion by 2025. Businesses are investing in more robust cyber defences, steered by regulatory mandates, including the Digital Personal Data Protection (DPDP) Act and increasing AI-driven safety threats.

Given the threats posed by cybersecurity, about 50 per cent of Indian businesses raised their cybersecurity spending by 5-12 per cent in 2024. As a result, cybersecurity SaaS solutions are becoming an integral part of business strategies, with companies strengthening their defences while ensuring compliance with evolving data protection rules.

India’s thriving startup ecosystem is benefiting greatly from the AI revolution. This report indicates that in 2024 alone, Indian startups are expected to attract nearly USD 1 billion in new venture funding. Of this, AI-focused companies received approximately USD 175 million. This wave in investment underlines the significance of AI in SaaS offerings as businesses and investors acknowledge the prospect of AI revolutionising industries and enhancing SaaS solutions.

AI-driven Innovation Propels SaaS and Cybersecurity Growth

An interesting insight from the report suggests that 90 per cent of early-stage software startups in India have introduced at least one AI-driven feature in the past year. This emphasises the significant shift towards AI integration in the SaaS industry, attracting robust investor interest to capitalise on this momentum.

The BVP report is the validation of the success that Indian SaaS unicorns and centaurs, companies valued at over USD 1 billion and USD 100 million, have achieved, pushing them to the forefront in leading the global SaaS revolution.

It's interesting to note that in 2023, Indian SaaS unicorns and centaurs combined added USD 5.9 billion in revenue, with Krutrim AI and Perfios riding on the AI surge. Besides, three new centaurs—Amagi, ShipRocket, and Innovacer—have cemented India's status as a global hub for SaaS innovation. SaaS companies are adding to India's revenue generation and setting new milestones for innovation, customer value delivery, and excellence.

The most emerging sectors in the SaaS industry include wealth-tech and industrial-tech. These sectors experience improved equity participation and a catalyst toward sustainable business procedures.

Digitalisation of businesses calls for an increased demand for potent cybersecurity measures. The report evaluates that India's cyber insurance market could take giant leaps and touch USD 800 million by 2030. The side effects of digitalisation lead to an increase in sophisticated cyber threats, forcing businesses to modify and upgrade their cybersecurity.

According to a survey, 99 per cent of companies intend to increase their cyber budgets by 6-15 per cent. The heavy investment in cybersecurity reflects the essence of data protection in the digital landscape. India is in an advantageous situation, with its ever-growing cybersecurity talent pool propelling its growth. It serves both domestic and global clients. With AI-driven threats becoming more prominent, the demand for cybersecurity solutions will witness an unprecedented rise.

What Lies Ahead for the Indian SaaS Sector by 2030?

The road ahead for the Indian SaaS industry is looking bright, with AI, cybersecurity, wealth tech, and industrial software leading the growth wave. As more organisations make the switch to AI-powered SaaS solutions, the market will witness an upward trend in revenue and global impact.

India's strong foundation in software development, clubbed with its booming expertise in AI and cybersecurity, has helped it cement a strong position as a world leader in the global SaaS market. Different venture capital firms, including Bessemer Venture Partners, will play a pivotal role in supporting the SaaS ecosystem, helping the industry achieve the USD 50 billion milestone by 2030. AI will significantly boost the industry by enhancing profit margins and delivering more excellent value to customers.

Riding high and with an impressive growth trajectory, the Indian SaaS industry may exceed the expectations of the USD 50 billion mark in 2030 to seal India's position as a global industry player. Fuelled by the driving forces—AI, cloud, and cybersecurity—Indian companies, including startups, are looking to innovate, scale up, and design a thriving digital ecosystem to benefit the business and clients alike.

The rise of SaaS in India is indomitable, mainly when it's fueled by AI integration, cloud adoption, and cybersecurity progress. There is no denying that with a solid foundation, promising regulations, and an expanding talent pool, India will advance to attain its position as a SaaS global leader. As the industry continues to flourish, companies worldwide will look up to India as a benchmark for innovation, resilience, and forward-thinking in the SaaS space.