India’s software-as-a-service (SaaS) sector generated over US$15 billion in annual revenue in FY24, according to JM Financial’s report, India’s SaaS: Taking Wings.

The study analyzed 250 SaaS firms with at least US$10 million in annual recurring revenue (ARR) and recorded a 24% CAGR from FY19 to FY24.

Over 36 companies have surpassed US$100 million in ARR.

With gross margins of 70–85%, SaaS firms are typically profitable as fixed costs remain stable while revenue scales.

Valuations have declined for smaller, horizontal SaaS firms offering industry-agnostic solutions.

Investors are now focusing more on profitability, free cash flow, customer retention, and acquisition cost recovery.

In contrast, vertical SaaS firms serving specific sectors like banking and logistics have grown faster, with a 26.3% CAGR. Notable vertical players include Perfios, Shiprocket, and Jumbotail.