The software as a service (SaaS) industry in Chennai, the SaaS hub of the country, is currently generating a revenue of over a billion dollars and employing over 10,000 employees.
The sector has raised over $500 million in funding so far, while many companies are relying more on revenue for future growth, said an industry official.
"The largest player, Zoho Corp, itself, is over $500 million and Freshworks is around $100 million in annual recurring revenue. With the others put together, the revenue of the SaaS industry in Chennai would be over $1 billion," said Suresh Sambandam, founder and CEO of Orange Scape and part of SaaSX, a movement of SaaS-based companies.
The Chennai SaaS firms have so far raised over $500 million, even as the largest in the flock, Zoho Corp, is a bootstrapped company. Sambandam said that even though his own firm, Kissflow, is funded, it has been working close to a bootstrapped fashion.
"One good thing about Chennai is we make more revenue than funding," he said.
Freshworks alone has raised close to $250 million in several rounds so far. On Wednesday, Freshworks announced its expansion plan to set up its second office in the country, in Bengaluru.
"Chennai has been the centre of our operations and we have seen the city transform into the SaaS capital of the country. Bengaluru is indisputably the Silicon Valley of India and hence became the obvious choice for expansion," said Girish Mathrubootham, CEO and Founder of Freshworks, while announcing the expansion plan.
Freshworks has recently secured a $100-million funding round led by Accel Partners and Sequoia Capital. Freshworks is also one of the fastest SaaS companies to hit $100 million in annual recurring revenue.
Zoho Corp has been expanding its presence in Chennai and has set up its centres in Tenkasi, in Tamil Nadu, and Renigunta, near Tirupati in Andhra Pradesh. The company is growing at a rapid pace in terms of manpower addition and it requires a lot of focus since the culture of the company is important.
"We have a headcount of around 6,000 people now. We have doubled our headcount in the last 2-2.5 years from about 3,000 employees. Our headcount addition is slower than what we could do since we want to make sure that we should also treat them well. It is a leadership challenge to keep that culture when we grow fast. We might be at about 10,000 employees in next couple of years and the majority would be in India," said Sridhar Vembu, CEO, Zoho Corporation, recently.
Apart from these companies, the other companies in the SaaS business from Chennai include Chargebee, Indix, Cloudcherry, Pipecandy, Xobin, Happyfox, Attune, Facilio, Klenty, and Gofrugal, among others.
The fundamentals of the SaaS start-ups in Chennai are clear and this gives them the strength to grow faster and better, added Sambandam.