Deeptech startups in India

How DeepTech will shape the future of Indian B2B SaaS

A recent report by EY and nasscom notes that 99% of Indian B2B SaaS companies have embraced DeepTech innovations.


In brief

  • AI/ML is the most leveraged DeepTech (54% of use cases), followed by big data/ descriptive analytics (39%) and intelligent automation (7%).
  • 1400+ patents were filed by inventive DeepTech firms over the past half-decade.
  • With rising scale of inventive DeepTech, the industry will become potentially even more attractive for global M&A.

Indian B2B SaaS firms are acquiring an increasingly significant place in the global B2B tech landscape. Powered by efforts of the technology ecosystem, the industry is leveraging DeepTech efforts to become a ‘Product Nation’, with potential to develop breakthrough software products.  

According to the latest report by EY and nasscom, Breaking ground: unravelling the DeepTech potential in Indian B2B SaaS’, Indian B2B SaaS enterprises are poised to play a prominent role in the global tech market, empowered by growing democratization and accessibility of deep technology. Through comprehensive primary and secondary research methodologies, involving interactions with 201 leading Indian B2B SaaS companies and industry specialists, the report lists many key developments in this space. 

1. Indian B2B SaaS companies are inherently DeepTech and AI/ML centric

A notable trend within Indian B2B SaaS landscape is the significant adoption of deep technology solutions to cater to customer use cases. The report indicates that 99% of Indian B2B SaaS enterprises have embraced DeepTech innovations as a strategic approach to addressing their clients' demands and concerns. This demonstrates the industry's commitment to innovation and emphasizes the need to develop more complex and impactful solutions in response to changing client needs.

Furthermore, AI/ML is the most used DeepTech by Indian B2B SaaS enterprises. Predictive analytics is the most common type of AI/ML DeepTech, especially in non-real-time applications, followed by Conversational AI. Customer analysis, marketing operations, business analysis, and talent analysis account for 70% of AI/ML application cases.

Deeptech startups in India

2. DeepTech can be leveraged even more widely by Indian B2B SaaS companies  

 

According to the report, 61% of Indian B2B SaaS businesses are working on at least one of the top 10% DeepTech use cases. This demonstrates a strong commitment to innovation via the use of cutting-edge technologies to address complicated situations. 60% of DeepTech use cases have ~2 companies working on each of them. This signifies the strategic selectiveness that companies exercise in choosing their focus areas. 

 

3. Focus on inventive DeepTech is key to future growth of Indian B2B SaaS

 

The focus on inventive DeepTech is critical to the success of Indian B2B SaaS, with the potential for breakthrough companies to sustain growth of Annual Recurring Revenue (ARR), Compound Annual Growth Rate (CAGRs) of 30%-50%. The report indicates that one in every four or 25% of Indian B2B SaaS enterprises today are inventive DeepTech focused. Inventive DeepTech represents the fusion of creative thinking and advanced technical acumen.  

By leveraging emerging technologies such as AI/ML, inventive DeepTech pioneers/forward-thinking entrepreneurs in India are devising ground-breaking solutions that address complex challenges and enhance customer experience. 

 

4. Enabling the DeepTech advantage for Indian B2B SaaS

 

The top three problems identified by Indian B2B SaaS companies are a lack of DeepTech talent (80%), patient capital (40%), and DeepTech infrastructure (27%). DeepTech demands specialized skills but recruiting and maintaining competent talent is difficult because due to high demand and limited availability. Secondly, DeepTech ventures involve longer development timelines and higher risks, making it tough to secure patient capital. Striking a balance between investors' expectations, regulations, market access and infrastructure is crucial for DeepTech start-ups.

Challenges of DeepTech

The enablers of DeepTech ecosystems i.e. access to open data, collaboration with academia, and engagement with industry and government bodies, can work in tandem to fuel innovation, accelerate technology development, and create a sustainable environment for transformative advancements.

Download the full pdf

Summary 

New generation B2B SaaS companies are leveraging the power of DeepTech to transform use-cases that deliver value to client. Prioritizing inventive DeepTech can potentially unlock sustained Compound Annual Growth Rate (CAGR) of 30-50% for breakthrough Indian B2B SaaS companies. This growth trajectory can be expedited through the establishment of a supportive ecosystem, robust talent and market infrastructure. This will enable India to further cement its position as a global “Product Nation” driven by an “Invent in India” mindset.

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