India’s AI-SaaS start-ups likely to employ 5 mn people by 2030: Study

 India’s AI- SaaS start-ups are likely to create a $500 billion market opportunity by 2030, with addition of 900,000 white collar jobs and 3.6 million indirect jobs, with a cumulative pegged at 5 million jobs, said a report by Stellaris Venture Partners , an early-stage venture capital firm, and International Finance Corporation (IFC), a member of the World Bank Group.
 
The report, released on Thursday, and titled 'AI Enabled SaaS: The Next Frontier for Global SaaS Start-ups from India’ is based on an industry-wide study conducted in collaboration with tech giants, including Cisco, Infosys, Amazon Web Services (AWS), GitHub, and Freshworks. In 2021 alone, $4.5 billion was invested in SaaS start-ups in India, an increase of 170 per cent from 2020, as per Bain & Company.
 
The report notes that 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. Moreover, the overall ecosystem for early-stage companies, as per the report, is backed by adequate high-risk capital, with individual and institutional investors who are focusing on software investments and industry-specific accelerators that are willing to support these companies in their early stages.

“AI, therefore, will not just be a “feature” in existing applications, but will help produce a new class of applications, creating ‘the’ next disruption in the enterprise software market. We believe that globally, AI represents a $900 billion revenue opportunity by 2030 from infrastructure, applications and services”, the study argued.

India, the report said, is well-positioned to be at the forefront of the AI revolution with its leveraging capabilities built during the IT and SaaS waves to build global AI applications and related services businesses. During the last decade, Indian companies have gained significant experience in building successful and category leading SaaS companies from India, it said.
 
“In the last 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 start-ups. 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 start-up ecosystem, experience of building successful SaaS companies, and world-class data & analytics talent,” Alok Goyal, Partner, Stellaris Venture Partners, said.

Ruchira Shukla, Head, South Asia, Disruptive Technologies – Direct Equity and VC Funds of International Finance Corporation (IFC), argued that 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,” she added.