Like Indian companies like Zoho, Freshworks and Browserstack, and pandemic-born high-flyers like Spendflo, Rocketlane and Everstage, cloud-based software purchased on an easy-to-join subscription model has jumped off the server in the last decade. I was. It has recorded high growth rates over the years. Nonetheless, the expected slowdown in 2023 could prove to be the first test for his SaaS founders in most of India, who are accustomed to running their businesses through 30-40% top-line growth. I have.
“There will be some impact on business growth. For example, we’re already spending less on marketing and sales. We’re seeing companies like Google and Facebook adapting. [layoffs in Big Tech]Retail purchases slow down and you see Amazon making changes,” said Manav Garg, CEO of the SaaS company that founded SaaSBOOMi, a community of over 800 cloud software companies. increase.
Garg said the trickle-down effect on the B2B SaaS community – where India has built a strong ecosystem to sell software to global buyers – will affect some product lines.
discover interesting stories
“So it all spills over into the B2B business. If you sell sales and marketing software, it’s going to be difficult,” he said.
Zoho, which is coming to an end after 27 years in business, will not lay off employees even though hiring is set to be more scrutinized.
Praval Singh, Zoho’s vice president of marketing and customer experience, said the company has seen the repercussions of the U.S. recession over the past two quarters, along with slowing sales cycles across the industry.
“Last year we had an amazing result. We have seen good growth again this year, but growth in recent quarters has been slow, so overall growth for the year will be slower than last year,” Singh said.
Recently, Chennai and US-based SaaS company Chargebee announced that it would lay off 10% of its workforce as it accelerates its focus on profitability.
San Mateo and Chennai-based Freshworks said it will lay off 60 people in India as it makes organizational changes to “accelerate business growth.”
India’s SaaS startup ecosystem is mostly made up of small companies with revenues of around $25M to $50M, with the exception of a few large companies. Suresh Sambandam, CEO of Chennai and US-based Kissflow and co-founder of SaaSBOOMi, says it robs them of the agility they need to seek out new revenue-generating product lines.
Nevertheless, the long-term outlook for India’s SaaS business is expected to outweigh the slowdown phase over the next 12-18 months.
Netcore Cloud, a self-owned SaaS company based in Mumbai, believes that moving from on-premises to the cloud is a driver of business growth, with more winds in its sails.
Founder Rajesh Jain told ET: 2022-23 is considered only temporary. It’s hard to tell if 2023 will be worse or better than 2022, and much depends on the extent of the slowdown/recession in the US and Europe. ”