7 May 2020
SaaS companies strategizing to beat the COVID-19 impact

    The SaaS (software-as-a-startup) community in India is a closely-knit unit. A community of Indian SaaS founders, SaaSBooMi, is coming up with several initiatives that will help the struggling SaaS companies tide over the current economic situation, thanks to the rampage being caused by COVID-19 across the world.

    The biggest relief for smaller SaaS companies is the upsurge of the pay-it-forward trend. Besides that, many initiatives are being implemented to protect the SaaS community from the repercussions of the global pandemic.

    Game plan

    SaaSBooMi, in partnership with Indifi- a fintech startup, is planning to roll out collateral-free loans for the struggling SaaS companies to help them cope up with the current fund crisis they are facing. The loan amount will be repaid in installments from the monthly revenues of the companies availing the same. The convenience of providing loans to SaaS companies is that their revenue cycles are predictable as it runs on a recurring scheme, as compared to others.

    Vinod Muthukrishnan, an entrepreneur whose SaaS company Cloudcherry was recently acquired by Cisco and now the leader of Cisco's contact-center business unit in San Francisco, is helping the startups to decide the loan scheme which is suited to their business model.

    Other seasoned entrepreneurs like Eka Software's Manav Garg and Pallav Nandhani, whose 18-year old SaaS company FusionCharts was sold to Idera a few months back are also working as consultants to the startups along with Muthukrishnan, in pro bono capacity. They will also provide their mentorship to the startups who need survival strategies to tide over the trying times.

    SaaS companies are also sharing their strategies and playbooks, even the close-door ones, with the younger startups. The playbooks cover almost all the realms, from UI ideas to user base penetration. This is an unprecedented move from the SaaS community, a never-before-seen measure being exercised to help younger SaaS companies. The companies are also sharing internal statistics and even spreadsheets.

    Push for the companies in the middle zone

    The SaaSBooMi initiative’s main focus is to help the startups who fall in the middle category. They need an injection of fresh capital funds as well as a mentor figure to steer them to a safer place, away from the storm. When every company is gearing for cost cuts, these companies should stick to their focus and achieve approachable targets for sustainability.

    The current impact of COVID-19 is not discriminatory. A struggling company or a company with a good revenue record faces the threat of going into the chopping block. However, the hardest hit SaaS sectors are those catering to hospitality and retail, where reports of companies earning just 10-12 percent of their normal cash flow have surfaced. On the other hand, the companies catering to e-healthcare, production and collaboration are witnessing a sudden upsurge in demands.


    The paradigm shift from on-site software to cloud technology has been a major driving force behind the growth of SaaS companies. It crossed $1.5 billion in revenue last financial year. On the other hand, among 600 companies, 625 of them have an average yearly revenue rate below $1 million. These companies need extended runways the most as they face the potential threat of permanent disruption.

    COVID-19 might turn out to be a boon for many companies, but for that they need to chalk up survival plans and resort to whatever help they can get a hold of, to reap the benefits in later stages.

    SaaS Startup  SaaSBooMi  Covid-19  Funding  SaaS companies  Startup India  Investment