Indian SaaS firms using AI could create $500 billion of value by 2030: report
Mumbai: Indian software-as-a-service (SaaS) startups that harness artificial intelligence (AI) could create $500 billion of market value by 2030, according to a report by early-stage venture capital firm Stellaris Venture Partners and IFC, the investment arm of the World Bank.
The report, titled ‘AI Enabled SaaS: The Next Frontier for Global SaaS Startups from India’, said India’s AI opportunity could create more than 900,000 white-collar jobs and 3.6 million new indirect jobs by 2030. We believe that globally, AI represents a around $ 900 billion revenue opportunity by 2030 from infrastructure, applications and services,” it said.
Based on an industry-wide study conducted in collaboration with tech giants including Cisco, Infosys, Amazon Web Services (AWS), GitHub, and Freshworks, the report said India’s opportunity will lie in AI-first software applications, AI application programming interfaces (API), platform BPO services and data stack services.
“In the past decade, India has become a significant player in the global SaaS ecosystem, with breakout companies across different software domains. As AI transforms enterprise processes across industries and functions, we expect massive value creation through a new wave of AI-first startups,” said Alok Goyal, Partner, Stellaris Venture Partners.
“We believe India could potentially generate a market value of $500 billion from both AI applications and services by 2030, driven by the country’s thriving startup ecosystem, experience of building successful SaaS companies, and world-class data and analytics talent,” he added.
According to the report, the immediate opportunity for India lies in leveraging capabilities built during the IT and SaaS waves to build global AI applications and related services businesses.
“India has a large talent base of developers and strong process expertise, along with a fast-growing pool of niche talent such as designers and data scientists in addition to the availability of unique data sets and sophisticated algorithms,” it said.
The report said that the overall ecosystem for early-stage companies is backed by adequate high-risk capital, with individual and institutional investors focussed on software investments, and industry-specific accelerators that are willing to support these companies in their early stages.
In 2021 alone, $4.5 billion was invested in SaaS startups in India, an increase of 170% from 2020, according to Bain & Company. “These in combination with the increased service intensity inherent to AI and the democratisation of AI infrastructure, is where India’s advantage lies,” it said.
The report said that AI was not just another new feature but a new wave that would help create a new generation of startups. “The use of technology to aid human judgement, as opposed to simply automating repetitive tasks, is ready for primetime,” the report said. “We believe that globally, AI represents a around $900 billion revenue opportunity by 2030 from infrastructure, applications and services,” it said.
“AI has the potential to solve complex problems on a global scale and can unlock a host of employment opportunities across the board. In India, there are several inflection points such as an abundance of data, storage capacity, and computing power, that are
priming AI to drive the next wave of business transformation. Several critical sectors such as education, healthcare, agriculture, logistics, and financial services stand to gain tremendously from AI-led solutions, driving inclusion and economic development,” said Ruchira Shukla, head for South Asia at Disruptive Technologies.