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Launching the SaaS Survey 2017 – by SignalHill and iSPIRT

The third edition of the popular India SaaS survey is here.

As always there are 2 parts, Form A, a 100% anonymous survey, and Form B, a distinct & separate form capturing company details for us to share the final report. Please note that forms A & B are kept distinct to protect your privacy. Both together take about 10 minutes to complete. Scroll down to read more about the survey.

India SaaS survey

image credit – Nick Youngson

What is the survey about?

Every burgeoning ecosystem requires a robust set of benchmarks to compare itself against and reach better levels of performance. Signal Hill and iSPIRT Foundation have been at the forefront of addressing this need for the Indian SaaS ecosystem. The survey aims to anonymously benchmark Indian SaaS companies to better understand the unique challenges they face and the unique advantages they leverage, creating a single reference point updated annually.

If you found the results of the 2016 SaaS survey valuable, please help us make the third version of this survey the most meaningful and relevant. It is a marker of the maturity of our Indian SaaS ecosystem.

What’s New?

What sets this survey apart from the previous two editions is the addition of two new sections to better understand, (a) how SaaS product companies achieve Product-Market Fit and (b) the effective metrics behind successful Inside Sales engines. With the addition of these 2 sections, the survey is poised to provide a complete analysis of the India SaaS advantage covering the product, market, sales & customer support.

Here are the takeaways from the 2015 & 2016 India SaaS Surveys:

2015: Horizontal applications dominated vertical specific ones
2016: Vertical focussed SaaS players occupy majority share of the scaled and funded respondent pie.

2015: 84% of respondents reported looking overseas for growth, ranking North America as their #1 target geography
2016: Unchanged, the US is the most favoured destination for Indian SaaS startups. With that said, whilst companies are building for global markets, the first market for companies to get traction in is typically India.

2015 & 2016: The median CAC payback period (for >$1Mn ARR) is 6-12 months. 

Staying Focused And Achieving The Product-Market Fit Are Key To Managing CAC.

It takes 10 minutes to fill the Survey

To participate in the 2017 survey, respondents will need to fill in two simple forms:

  • Form A, a 100% anonymous survey, 100% multiple choice, and
  • Form B, a distinct & separate form capturing company details for us to share the final report.

Please note that forms A & B are kept distinct to protect your privacy. Your 10-minute contribution to this effort will be hugely useful in helping the Indian SaaS ecosystem benchmark itself.

Some highlights from the web

ET Tech, 2018 is poised to be the year of Indian SaaS explosion. 

An anticipated increase in global spending on information technology over the course of this year will be a big driver for SaaS companies, even after factoring in changes in political climate such as Brexit and churns in global markets.

Tracxn Report for India SaaS (2017) 

The growth in SMEs and their increased cloud adoption and government initiatives such as Digital India are also expected to drive the SaaS market. Increasingly mobile workforces are also pushing the adoption of SaaS with startups and companies providing mobile-first applications.

 

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Announcing The 2016 India SaaS Survey – A Joint initiative by Signal Hill & iSPIRT

According to a recent report by Google and Accel Partners the SaaS market in India is expected to cross over $50Bn by 2025, driven largely by demand from Western markets, in particular from US-based SMBs. Indian firms are noted as uniquely qualified to serve this opportunity given the available talent, mobile-first mindsets and language skills that enable cost-effective inside sales.

the-2016-india-saas-survey

In realizing this opportunity, however, there remain a number of hurdles to be cleared. To understand these challenges, and gain insight into the SaaS landscape in India, Signal Hill, a reputed independent advisory boutique and the iSPIRT Foundation conduct the annual India SaaS Survey which is open to all SaaS businesses in India.

We are happy to announce the second edition (2016) of this survey. Like last year, the survey aims to create a single reference point for all players in the SaaS ecosystem to understand:

  • Company & product profiles
  • Delivery mechanisms
  • Sales methods & channels
  • Scale & traction
  • Customers & key markets
  • SaaS metrics

From last year’s survey, some key takeaways included:

  • Indian SaaS players are predominantly young companies striving to exceed US$1m in ARR
  • Horizontal applications dominated vertical specific ones
  • Most companies surveyed offered multiple products; in contrast, Indian SaaS leaders recommended a narrower, more focused approach
  • 84% of respondents reported looking overseas for growth, ranking North America as their #1 target geography

To view the full report, click here.

To participate in the 2016 survey, respondents will need to fill in two simple forms Form A, a 100% anonymous survey and Form B, which records company details for us to share the final report. Note that A & B are kept distinct to protect your privacy. Overall, the surveys are 100% multiple choice and will take ~10 minutes to complete, providing the ecosystem with invaluable data & insights.

Apart from the core analysis of the industry and its challenges, participating companies will have their company logo featured in the report and they will also receive a surprise gift from the organizers as a token of appreciation for their support, time and valuable inputs.

It goes without saying that relevant solutions are found only when problems have been clearly identified and understood. Your 10 minute contribution to this effort will be hugely useful in helping the Indian SaaS ecosystem to get there.

We look forward to hearing from you.

 

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2015 India Technology Product M&A Industry Report: M&A and Investment landscape in India

iSPIRT, India’s software products think tank, SignalHill, technology focused M&A advisory boutique firm and Microsoft Ventures, accelerator program for high potential technology startups released the much-awaited 2015 India Technology Product M&A Industry Report. The report highlights key trends in the Indian technology M&A and funding landscape so far as well as predictions for M&A activity in the following year.

To access the report, visit: PMI Report

To watch the Think Next Roundtable: ThinkNext Video

iSPIRT PMI Report

(L-R): Sanat Rao, Partner, iSPiRT M&A Connect; Ravi Narayan, Director of Microsoft Ventures, India; Klaas Oskam, Managing Director, Signal Hill
(L-R): Sanat Rao, Partner, iSPiRT M&A Connect; Ravi Narayan, Director of Microsoft Ventures, India; Klaas Oskam, Managing Director, Signal Hill

M&A

According to the report, technology majors as well as large Indian ‘Unicorns’ are predicted to continue acquiring Indian technology product startups to fill technology gaps as well as talent requirements. Since 2011, there have been 190 M&A transactions involving Indian technology product companies, with a total estimated transaction value of $2.27B. That makes the average deal size in India stand at $11.3mn, far lower than that of mature startup ecosystems such as Israel ($113mn) and the US ($57mn). Furthermore, there’s a substantial difference in value between inbound and domestic transactions. Inbound M&A transactions (M&A by global acquirers) average $21.1M versus domestic deals that average $8.4M. Therefore domestic transactions may account for the lion share (72%) of M&A activity by volume (largely driven by the Indian ‘Unicorns’ including Flipkart, Snapdeal, OlaCabs) but a much smaller share (51%) by value.

M&A

From a sector perspective, there seems to be a clear trend emerging where the majority of M&A transactions and transaction values of B2B software companies is cross-border in nature, while domestic transactions account for the bulk of transaction value and volume for Internet & Consumer and E-Commerce deals.

INVESTMENTS:

From a funding perspective, VC/PE investments in India have hit an all-time high in 2014. Funding in the E-commerce and Consumer Internet markets have grown 38x from 2010-2014. $4.2B was invested in this space 2014 alone, with the two main companies (Flipkart & Snapdeal) accounting for > 50% of the Indian internet investment dollars. Investments in B2B software are also showing an upward trend.

With a fear of missing out, hedge funds & private equity funds are investing in ‘new’ Series B ($10-25mn) and Series C & D ($20-250m) onwards, fueling a frenzy in valuations. Prior to 2014, it would take startups at least 1-2 years to raise series B and C funds. In the last 12 months, this has dropped by half with companies reaching this mark in less than a year.

Investments

OTHER HIGHLIGHTS

The report indicates that a generation of entrepreneurs is coming up in India, looking to build deep-tech companies in the country. Where B2B software companies are aiming at serving the global market, the Internet & E-commerce businesses are focusing on India. These are vision-driven and are focused on creating a market differentiator rather than “selling-out” early. These entrepreneurs are also likely to be angel investors and help other startups succeed, in parallel to running their own firms.

The report also highlights two key challenges that Indian entrepreneurs and startups face: Discovery & Readiness. Most startups are not on the radar of the large global tech companies either for business engagements or investment, which in turn reduces their chances of going through an acquisition. iSPIRT’s M&A Connect Program is solving this problem via targeted connects between US and Indian tech companies with specific technology gaps, and exciting India startups who can fill these gaps.

[Any startups with ongoing M&A discussions, please reach out to [email protected] for advisory support.] 

PREDICTIONS

Finally, the report makes some interesting predictions for M&A and investments in India in 2015.

M&A activity will continue to accelerate. Domestic transactions will dominate E-Commerce and Consumer Internet, with large Indian “Unicorns” will aggressively make strategic acquisitions to enhance market dominance and strengthen strategic growth areas such as: mobile, data & analytics and payments etc. Cross-border M&A will dominate B2B / Enterprise Software transactions.

Acqui-Hires will continue to be a critical focus for US and India acquirers. Areas of interest include iOS &Android engineers and Machine Learning/Data Science experts, whose demand is rapidly growing.

Finally, from an investment perspective, E-Commerce and Consumer Internet sectors will continue to be hot into 2015. Internet of Things [IOT] will also receive significant interest from VCs.

Seems like the market is hot and there’s a lot of activity predicted for 2015. Exciting times ahead… Stay tuned!

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Announcing the second edition of iSPIRT’s index of the top 30 B2B software companies in India! 

We believe this index adds an important objective component to the discussion on the emerging B2B software industry in India and shines a spotlight on an under-reported sector to drive policy, entrepreneurship and advocacy.The first edition of the iSPIxB2B index was published six months ago – the report and blog post are here.  We got numerous press mentions, including in the Economic Times, Hindu and Tech in Asia, and a lot of tweet love.

So now we need your help: please recommend and put us in touch with any strong B2B software companies that you know that meet the following criteria.

  • the company sells software (such as marketing automation or storage infrastructure) to businesses on a license or subscription basis OR provides a B2B service (such as an ad-tech platform) driven through a differentiated software offering
  • the company was founded in India or has co-founders who were/are based in India
  • the company has $5M (Rs 30cr) or more in annualized revenue and/or is worth more than $25M (Rs 150cr)
Just fill in the fields in the form or you can email us at ispix(at)ispirt.in
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Inflexion – Technology Summit: An evening of insights and observations

I was invited to “Inflexion” an event organized by Signal Hill and iSPIRT. The duo have in the past co-created the report on Technology M&A in India (link) which was very educational, so my interest was piqued and decided to go.

The evening was started by Scott Wieler, Chairman & CEO Signal Hill. He mentioned that $6.9Bn of VC/PE money has been invested in India in last four years (2011-14). However, the M&A value generated is just $1.7Bn. So with a value creation ratio of 0.2x, India is far behind US (3.0x) and Israel (5.3x). This led to the insight that M&A values will need to increase by more than 15x over next 3-6 years for this ratio to catch up to US and Israel levels. My hope is recent acquisitions by Flipkart (Myntra), Snapdeal (Unicommerce), Facebook (Little Eye Labs) and Twitter (ZipDial) – are good trend in this direction, and we will see a lot of action happening in next couple of years. This augurs well for Indian entrepreneurs.

Next came the retrospective by N.R.K. Raman – co-founder of i-FLEX Solutions. Very interestingly his company was probably the first VC/PE backed unicorn in India! They were bought by Oracle for nearly a billion dollars. A lot of i-FLEX’s story was about perseverance and street smarts. We keep on talking about product-market fit – this was a phenomenon written all over i-FLEX’s success. The founders were working in the banking software industry inside a bank (Citigroup) – and understood the inefficiencies of the system. They jumped the boat, separated from the mothership (albeit Citi wrote them their first $400k) – and launched a product that found ready takers in the market. It was not the dramatic high burn, breakneck growth story but rather a well thought out, methodical plan executed with hard work and business fundamentals kind of story.

As the night became young, Flipkart’s co-founder Binny Bansal and YourStory’s Shradha Sharma, stepped onto the stage. Binny said that the one thing keeping him awake at night is “finding high quality talent and retaining them” – interesting to note that the big guys have still the same challenges as newbie startups. As an investor, I feel it is becoming very competitive to hire good talent. That one perfect designer or product manager you have found – chances are will have multiple offers in hand, if not thinking about doing his own startup already. The other big focus area that Binny mentioned was mobile – if you look at the data, I think the writing is on the wall – by 2016 – 80%+ of India’s internet population will access Internet more by mobiles than by desktop and my guess is 60%+ of India’s internet population will have never accessed internet using desktop. So Flipkart’s worries are talent and mobile.

Then Sharad Sharma, iSPIRT co-founder and Governing Council member, delivered a short punchy talk. He explained how small sub $50m dollar exits are the lifeblood of any tech ecosystem. Unless they happen in enough numbers we won’t get Billion dollar exits in the long haul. I learnt that iSPIRT’s M&A Connect program has been instrumental in getting Facebook, Corporate Executive Board, Yahoo, Intuit and Twitter become first acquirers in India! The M&A Connect program is now on a one-acquisition-a-month run-rate and aspires to get to a one-acquisition-a-week rate in the coming years. What an inspiring story of volunteer magic changing our ecosystem for the better!

Sharad then talked about global SaaS startups. They are gaining momentum. He also outlined why software product startups targeting Indian SMEs will be big in the coming three years.

We then broke for drinks and dinner. The book “Conquering the Chaos: Win in India, Win Everywhere”, authored by Ravi Venkatesan, iSPIRT Adviser and former Chairman of Microsoft India, was gifted to attendees of the event. It promises to be an interesting read.