Rise of India SaaS

Prakash Narayan-

SaaSBOOMi, a volunteer-driven community of product leaders and SaaS founders, hosted an in-person event at the Rosewood Sand Hill Ballroom in Menlo Park last month that brought in founders, venture capitalists, serial entrepreneurs and industry legends.

The SaaS market in India has seen a rapid growth in the past few years – including a NASDAQ IPO for Freshworks. Many Indian companies in this sector continue to attract a diverse range of investor interests across various investment stages.

The event began with Manav Garg, Founder and CEO of Eka Software Solutions, and Girish Mathrubootham, Founder and CEO of Freshworks, walking through the beginnings of SaaSBOOMi (in 2015) and the success of India SaaS companies. At least 19 companies have unicorn valuations. With 1500+ companies in  India’s SaaS industry, they generate $3-$4b in revenues each year – which is 1% of the global market. The goal is to grow to 6% by 2030.

Vinod Khosla spoke next (via Zoom) in a conversation moderated by Manav Garg. He talked about the importance of hiring the right people in the company. He cited examples of how the early hires at Sun Microsystems went on to become CEOs of large, public companies: Carol Bartz became CEO of Autodesk in 1992 (and, later in 2009, the CEO of Yahoo!); Eric Schmidt became CEO of Novell in 1997 (and, later in 2001, the CEO of Google). While there is talk of the “PayPal Mafia” today, there existed a “Sun Microsystems Mafia” long before that J. He referred to the article “Engineering the Gene pool of a company” on khoslaventures.com.

When Manav Garg pressed him hard on the question of pool of shares to set aside for employees, Vinod’s response (which visibly surprised Manav and the audience) was that his recommendation for his son’s company was to have an ESOP pool of 60%.

Vinod also talked about the importance of AI is just about anything. Specifically, he talked about AI being used to autogenerate code – where Microsoft is partnering with Github Copilot. Described as “AI pair programmer”, this extension to Visual Studio code has been trained on billions of lines of public code.

This was followed by a Fireside chat between M.R. Rangaswami, Founder of Indiaspora and Girish Mathrubootham on the topic of “From Madras to NASDAQ”. Girish spoke about the trials and tribulations of taking Freshworks public – a journey that started in Oct. 2010. Girish rang the bell and took the company public in Sept 2021 – with a $10b valuation. His advice to the entrepreneurs in the room is to dream in increments. This is the sage mentoring that he received from Shekhar Kirani of Accel Ventures.

The final talk of the evening was a panel discussion moderated by Priya Rajan, Managing Director at Silicon Valley Bank. Joining her in the panel were Guru Chahal, Partner at Lightspeed Ventures; Arun Matthew, Partner at Accel; Deep Nishar, Managing Partner at General Catalyst.

They pondered on several topics regarding SaaS in India. Deep Nishar wondered why RPA did not originate in India – given that the BPO services in India were doing repetitive work for such a long time. It took a U.K. company, Blue Prism; a Romanian company, UI Path and a Silicon Valley company, Automation Anywhere to come up with the concept of RPA at almost the same time in the early part of this century.

Overall, it was a very uplifting evening. We heard how the seeds of India as a leader in the product engineering industry are planted. India is now firmly positioned as an innovation destination.