India’s SaaS market is projected to reach $50 billion by 2030, with a possibility of an upward revision on the back of artificial intelligence (AI), stated a report by venture capital firm Bessemer Venture Partners (BVP).
It also underscored the growth potential of the industry, driven by an increased focus on cybersecurity and increasing cloud adoption by the banking, financial services and insurance (BFSI) and manufacturing industries.
It also noted the addition of three new centaurs in India — Amagi, ShipRocket and Innovacer—further solidifying India’s position as a global SaaS hub. In 2023 alone, the report said, Indian SaaS unicorns and centaurs collectively added $5.9 billion in revenue.
The Bengaluru-based firm said that nearly 60 per cent of start-ups, previously pure SaaS companies, are now evolving into AI-enabled SaaS providers.
Accelerating investment
In 2024, Indian start-ups are set to attract nearly $1 billion in new venture funding, with AI-focused companies capturing approximately $175 million, the report added. This surge in investment is indicative of a broader trend where AI is becoming integral to SaaS offerings. Notably, 90 per cent of early-stage software start-ups in India have launched at least one AI feature in the past year.
Cybersecurity Landscape
The Indian cybersecurity market, valued at $6 billion in 2023, is projected to more than double to $13.6 billion by 2025. This growth is fueled by an expanding talent pool, increased budgets, AI-driven threats, and regulatory frameworks such as the Digital Personal Data Protection (DPDP) Act. Notably, despite economic challenges, nearly 50 per cent of Indian enterprises have increased their cybersecurity spending by 5-12 per cent in 2024 alone.
“AI is the next revolution in software, and we expect all software to transition to AI native, AI-enabled, or AI-infused in some way. India is also in a unique position with its large base of AI developers and global leadership in business and professional services. We believe AI will be a big boost to this industry by enabling better margins and higher customer value delivery. In addition to AI, we believe cybersecurity, wealth tech and industrial software are 3 other key trends that will lead the next leg of software growth in India,” said Anant Vidur Puri, Partner, Bessemer Venture Partners.
