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Least amount of distress sales, shutdowns in SaaS: Upekkha report

Economic Times · 1y

According to a report by Upekkha, a software-as-a-service (SaaS) accelerator and fund, the SaaS sector in India has witnessed the least amount of distress sales and shutdowns compared to other sectors. While the report indicates that funding for Indian SaaS startups decreased slightly in 2023, it predicts that the sector will continue to experience less disruption in the coming years. However, the report also emphasizes the challenges faced by SaaS companies in terms of revenue generation and market saturation, particularly for those that have raised significant funding without achieving substantial revenue growth. The report suggests that consolidation and acquisitions will be driven by past investors and that companies will need to focus on user interface and the integration of AI workflows to stand out. Deal activity, especially at the Series A stage, has been declining. Investors are now scrutinizing business metrics and sales distribution channels more thoroughly, indicating a shift away from the frenzy of investing in SaaS businesses purely due to FOMO.