SaaStr 2022: The Rise of Cross-Border SaaS From India

SaaStr 2022: The rise of cross-border SaaS from IndiaThis year’s SaaStr was fun. I ran across several of our portfolio company founders as well as many other founders, several after a pandemic-induced gap of a couple of years. Across the event one thing stood out to me. Indian founders are evolving fast, even through this market downturn.  The momentum that Indian SaaS companies have gathered in the last two years is proof that our optimism in the India story is well-founded. 

To illustrate the different nature of these cross-border SaaS companies, I sat down with Rajoshi Ghosh from Hasura and Rohit Choudhary from Acceldata at SaaStr Annual

It was a fun conversation, peppered with anecdotes from the two founders,  building two companies that have very different business models. Acceldata is building a data observability platform with a commercial direct sales model, and Hasura is an open source-based enterprise software firm with a product-led motion. Both have created their categories and have been at it for 3-4 years. There were some useful takeaways from our conversation. 

Cross-border SaaS is coming of age

Cross-border SaaS is not a new phenomenon. It’s already here. There are many companies that have set up elsewhere and then expanded to the US, the largest market for SaaS companies. Some examples include Mulesoft which began in Europe, FreshWorks which started from India, Atlassian that has expanded from Australia.

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In terms of the Indian ecosystem, this cross border motion has grown a lot in the past few years, with a ton of investment going into it. This has been possible due to India-specific advantages as highlighted below:

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Perfecting the playbook

Before launching into the US market, most SaaS companies operate from their local market without a footprint in the US, building/pivoting their product while getting market input from trips to the US. Acceldata and Hasura are great examples of this. Their India-centric operations let them perfect the product before spending a lot on sales and marketing. They also had access to great engineering talent in India from local erstwhile startups as well as US companies with engineering teams in India.  Acceldata’s founders came out of Hortonworks.

1. Local to global

For infrastructure and data companies, the way their product is structured is pretty universal, depending more on the quality and quantity of data rather than geography. In such cases, the time to PMF for a company that has perfected the playbook in Asia, would likely be significantly shorter when it moves to the US.   

Rohit spoke about the advantages that Acceldata had in Southeast Asia and in India. Telecom and financial data have exploded in the region due to faster 5G rollouts and the explosion of digital payments. That helped Acceldata access a lot of data and data systems very early in their journey. “So we were able to perfect the product and get it ready,” said Rohit. The difference would be in the pricing or the way deals are negotiated in different regions. 

2. Product maturity important for mature markets

Rohit further spoke about how it is important to bring a mature product when selling into a mature user market such as the US. “The US is an iPhone first market, (so) your product experience has to be really good. So if you really want to sell into this market, especially in a complicated mature market, then you have to bring a mature product. So if you feel that, you know, there is a segment where you have to sell with a lot of maturity, then you need to wait for a longer time, let the product bake. And then you move,” he said. Expectations are high on quality of user experience as well as security, governance and compliance while a higher proportion of customers prefer self-service.

PLG matters

For Hasura, the journey was different because an open source, developer focused motion has a very bottoms-up approach, different from the top-down motion Acceldata had. Hasura took a few years to perfect the product experience, because the growth was product-led. In an open source environment, Rajoshi said, their job was to ensure the users have a very seamless and pleasant experience. “We invested a lot and made sure that the product experience was great, our documentation was great, people could get started without talking to anybody. So that was our focus. And we could do that without geography getting in the way. So we actually sold our very first few enterprise deals, pre having a sales team, without actually having a presence in the US, but selling to enterprises in the US…,” she added. 

Same and different

As a general principle, data infrastructure companies have demands that are similar the world over, while applications companies get more personalised to cater to specific countries or regions.

So for an application layer firm, if the business reaches product market fit (PMF) for your SaaS application in one region, and then you move to another region, you’ll have to regain PMF. And that typically takes 12-18 months of time. So it is a good idea to bake that timeline in, when you go to new geographies. For a data infrastructure firm like Acceldata, this was significantly less.

Rohit agreed. “We don’t look at the market from a lens of which country you are in, we actually just look at it from one lens, which is how much data you have. And if a 5G network is bringing 100 terabytes of data, then you’re as valuable a customer as a customer in the US. The only difference is that there will be a certain difference in price point, there will be a little bit more negotiation, or there will be a little less,” he said.

Metrics may be misleading

Entering the US from a less mature market like India often means founders show great customer lifetime value (LTV), customer acquisition costs (CAC) ratios, payback ratios, margins that look very encouraging. But a closer look usually reveals that they are under-investing in sales and marketing. 

In our experience with startups over the years, the way to really win in markets, especially in the US, is for businesses to be on top of their game when it comes to sales and marketing. And you have to invest ahead of the curve, get sales leadership and sale representatives on board, and invest in areas like demand generation. 

Product-market-fit vs project-market-fit

In a bottoms up motion like Hasura, the concept of project market fit is an interesting one. Rajoshi explained it as the stage after a particular open source project becomes popular enough within the community. Once that happened, Hasura figured out the monetisation, the first step towards project-market fit. “The idea here is that your project is popular enough, enough developers are using it, and there is actually a potential for this to have project market fit and then kind of build up,” she said. 

It is great to hear from businesses who are building and successfully expanding into mature markets with different SaaS models. Both Hasura and Acceldata have had interesting journeys and it was great to hear from them on their own unique opportunities and challenges. 

We are always open to hearing more from SaaS and infrastructure software founders. DM me on LinkedIn or Twitter

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