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While the long-term story for the software-as-a-service (SaaS) start-ups from India look exciting, finding the right talent at present has been the biggest challenge for the sector, Freshwork’s founder and CEO Girish Mathrubootham said.
“We are seeing several trends through the Together Fund, an $80-million seed fund for finding and helping global SaaS start-ups from India. A lot of vertical SaaS, CRM and development tools are coming from Indian start-ups. Early traction has been seen for web 3 and crypto start-ups as well. This is going to be the decade for India as a product nation,” Mathrubootham said during an interaction with Sequoia Capital India’s Managing Director Rajan Anandan at the Nasscom Technology & Leadership Forum 2022.
He added, “When we started, the biggest problem was to find the right office space. But today’s biggest challenge for us and the entire (SaaS) ecosystem is whether we have enough experienced talent to quickly ramp up and scale the business. We have a lot of youngsters and qualified engineers in India, but are they ready? This is a growth problem.”
Anandan said that the growth of SaaS start-ups is very visible with the kind of traction they have been getting. Sequoia Capital’s Surge 06 cohort had 60 per cent B2B SaaS start-ups.
Post-IPO correction
After a blockbuster listing on NASDAQ, Freshwork’s stock price corrected in a recent trend of market-wide tech stocks sell off. Mathrubootham remains optimistic of the company’s long-term growth.
He said, “Regarding the correction, we are in this (business) for the long game. An important conversation to have with the employees as well, is to zoom out and look at the larger picture. We cannot control what the market does but we are well capitalised. We raised a billion dollars in the IPO and we have more than that in the bank.”
“There are three big opportunities for us. We are working in the customer service space, IT services space and the broader CRM market. We have an amazing team and great products that the customers also love. In a good market, we are talking about 20-40X multiples and in a bad market maybe it can be down to 5-7X multiple. Focus on the execution, and eventually things will work out.”
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