Kushang Kumar

Kushang, Co-Founder, ADURCUP.

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Indian SaaS Startups Playing Big For Investors

Cloud-based ventures have already proved in recent years that they are ready for the big game by attracting a large number of audiences and marketplaces.

Show us a hospitality startup, and we will show you an investor. This has been a simple mousetrap for business founders that are looking for investors who can supply them with capital.

However, rarely does a Cinderella story happen in real life, as there is no real shortcut to funding. This is a harsh reality, however, most of the business founders are aware of this. The reason being, investors know that about 20% of new ventures fail in the first year, 30% fail in the second year and by the end of 5 years about 50% of them have shutters. Hence, it is in the nature of the investors to be cautious and doubtful before investing in startups.

Be it networking, marketplace, or finding the right business niche, Business founders have been continuously trying to pull the right cords. However, at the end of the day, it is not what you put up, or how you put up.

What matters is the credibility of your business in the long run and how prepared the business is to withstand the competition and adversities.

In the past we have witnessed that whenever there comes a crisis, technology proves to be a trusted ally. This time is no different, hospitality service providers have found technology coming to their rescue. Amongst the technology-enabled services, Cloud business models have gained more traction due to 2 important reasons:

1. Cost-Effective Alternatives, and

2. Require Less Space and Time

Why are Investors lured towards Indian SAAS Startups?

The 3 most evident reasons that attract investors to SAAS business platforms that come to notice are:

● Capital Efficient Startups

SaaS companies are extremely capital-efficient. You can build a large, profitable business for less than $10m in funding. The main cost is charged towards the technology only, as cloud-based startups don’t cost you much on the space and human resource front. This helps in making SAAS business models capital efficient.

● Gains a Large Amount of Traction

A new venture will always have to demonstrate that it has a marketable product or service—typically has the ability to sell the product or service available to most of the marketplaces and audiences. In some way, the venture must have a “proof of concept” to show investors. Cloud-based ventures have already proved in recent years that they are ready for the big game by attracting a large number of audiences and marketplaces.

● India Entering in its Golden Period

Be it human resource, foreign investments and relations, or business hungry markets, India has it all. In recent years, there has been significant growth in the number of SAAS-enabled companies starting their business in India.

Abundant and relevant software talent, low production cost, and universally viable products are consistently attracting more investors giving Indian Software-as-a-Service (SaaS) startups a hope of becoming the new generation’s Wipro or Infosys. The number of startups has increased from 3,000 in 2014 to 5,000 in 2016 and is estimated to cross 11,500 by 2020. Major reasons for this phenomenal growth are huge funding, a massive supply of talent, and dynamic entrepreneurial nature.

Investors have found out to be in the right place at the right time in the right niche while investing in Indian SaaS startups. The trend has just begun and is here to stay for a long time.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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