SaaS Firms Gain Favour with the US Marketplace in a Spot.

by The Journal Story August 10, 2022 0 Comment

Macroeconomic challenges, according to founders, may prompt businesses to spend and recruit carefully.

Top entrepreneurs and executives claim that Indian Software as a Service (SaaS) vendors are narrowing their focus on products, making wise hiring decisions, and cutting back on marketing expenses while also exploring new market and geographical niches due to the current economic tightening in the United States.

According to several SaaS businesses, the small business category has seen an increase in churn as the first-order macroeconomic headwinds reach Indian shores. Although firms assert that Indian SaaS operating margin levels are greater than those of global peers and international competitors in the consumer segment, macroeconomic concerns have been noted as a clear and present “risk factor.”

In its quarterly performance report, Freshworks, a Nasdaq-listed provider of business software, noted that even though the small and medium business (SMB) market was experiencing an increase in customer churn, the business mix was steadily shifting toward larger deal sizes, strengthening its business model.

“As our business has moved more upmarket, our largest customers today represent the majority of our business at approximately 57% of our ARR [average recurring revenue, a key SaaS metric]… we are seeing steady increases in the average revenue per account, reflecting our ongoing customer expansion and larger deal sizes,” Freshworks added.

CleverTap said that the cost of operating a firm with most of its commodity development and go-to-market sections in India still benefits.

“The SMB segment is seeing some churn, but if you look at the enterprise segment, which is $100,000 Annual Contract Value and above, there is resilience. Thirdly, there is nothing like a crisis to spot an opportunity,” said Anand Jain, the enterprise’s co-founder.

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