Why is Chennai the New Saas Capital of India?

Written by: medhasejpal
12 Min Read

Chennai, also known as the Gateway to the South, is now becoming The Gateway for SaaS businesses. The unparalleled development pace of the Chennai start-up economic model, especially in the SaaS segment, is truly admirable. This statement is according to a white paper on Chennai: A hub for SaaS startups published by Ernst & Young (EY). This white paper was revealed on Friday at the Chennai Micro Experience of the FinTech Festival India 2021-22.

The white paper sheds light on Chennai’s booming start-up environment and provides a detailed outline of how the region is quickly becoming a powerhouse for SaaS-based startups.

In the state, there are 55 universities, 2,267 colleges, 527 technical institutes, and 447 polytechnics. Approximately 4,00,000 engineers and technologists are added to the workforce each year. According to the white paper, Chennai’s diversified and substantial skilled workforce is a key lure for these enterprises. The prime reason for this is that it provides SaaS companies with lots of opportunities to grow their businesses within the city.

The Success Stories of Chennai’s Corporate World

The preponderance of companies in Chennai’s start-up community are SAAS businesses. As a result, the rise of innovative businesses has not been limited to the last few years. However, there has been a significant increase in the number of businesses that provide software services. In reality, more than 2,000 SAAS-based start-ups have been established in India since the fundraising boom of 2015. Almost a fourth of them are based in Chennai or have departments there.

Top Chennai SaaS Companies

Thanks to the growth of firms like Zoho and Freshworks, Chennai has deservedly earned the status of SAAS capital of the country. While both of these firms are the biggest success stories in the universe of Indian-based SAAS companies, having just surpassed the $500 million revenue mark, they aren’t the only ones driving the Chennai brand in the market. Chargebee, CloudCherry, HappyFox and FourKites are among the companies carving out a niche in the sector. Let’s take a look at how these businesses function and why they can be ideal companies for you to work for:

  • Zoho

Zoho Corporation is an Indian technology organisation that develops internet-based business tools. It is popular for its online Zoho Office Suite. The firm was incorporated by Sridhar Vembu and Tony Thomas in 1996 and now has a presence in seven regions. It had its global headquarters in Chennai and corporate headquarters in Texas. As Zoho is a product based software firm, there is always potential for learning new things and nurturing creativity.

  • Freshworks

Freshworks is a SaaS firm that provides customer engagement solutions for IT, customer service, marketing and HR. It develops a suite of products that includes Freshdesk, Freshservice, Freshsales, Freshteam, and the Freshworks Neo platform. The products provide analytics, administration and security solutions, collaboration, event streaming, and client records. Freshworks has a culture that encourages quality work, pride and pleasure in that work, execution speed, and has a customer-centric approach.

  • Chargebee

Chargebee is an esteemed global FinTech firm that provides subscription-based billing systems for SaaS and eCommerce businesses. It was developed with the objective of delivering a world-class billing experience to customers and managing customer subscriptions. Chargebee’s highly proficient team delivers apt support that assists companies in quickly executing best practices and compliance needs. Chargebee stresses its ‘people-first’ approach towards its work culture and is hence preferred by a variety of professionals.

  • Kissflow

Established in 2003 as Orangescape, Kissflow is a renowned cloud-based B2B Indian tech organisation offering ace SaaS platforms for business operations, work process automation, and digital ecosystems. Kissflow aids in initiating procedure requests, viewing tasks that necessitate user actions, and approving pending tasks. Kissflow has its headquarters in Chennai, India, and has operations in North America as well. Kissflow takes pride in its collaborative culture, which helps unlock innovation in employees in their day-to-day tasks.

  • HappyFox

HappyFox is a SaaS support platform. They provide an enterprise-grade help desk ticketing mechanism and an eloquently curated live chat software. It has clients from over 70 countries and is headquartered in Irvine, California. Its products are used by companies that cover media, education, e-commerce, information technology, retail, manufacturing, government, non-profit, and multiple other domains that have an external or internal support operation. The career growth and the compensation offered by HappyFox are the chief factors that attract competent talent.

  • FourKites

Last but not the least, FourKites is another reputed technology firm that is present in Chennai with its headquarters in Chicago. FourKites connects end-to-end supply chains across the globe with highly robust and dynamic technologies, helping their clients and their clients work better together. FourKites is identified as one of the best places to work amongst mid-sized firms in India. It focuses on solving complex problems that govern meaningful change for the world’s digital future. It is also named as one of Forbes’ Next Billion-Dollar Startups.

Software and technology are not the only industries in Chennai that are thriving. Despite its tiny size, the city boasts a booming analytics and artificial intelligence industry that provides innovative solutions to a variety of businesses and organizations. In Chennai’s booming tech bubble, AI start-ups such as Crayon Data, CruxIQ, and Mad Street Den are paving the way for innovation.

The Prime Reasons for Chennai’s Business Success

There are a plethora of reasons for Chennai’s business success. The prime ones are:

  • Student population: The large student population in Chennai is one of the leading factors. There are many sciences, technological, and engineering institutes in Chennai, including IIT Madras, Chennai Mathematical Institute, Anna University, and an increasing number of private colleges. There is also a large number of newly graduated individuals in need of jobs.
  • Favourable Ecosystem: The nature of Chennai’s ecosystem is also a significant facet of the city’s startup surge. One of the most dynamic start-up incubator networks in the world is in Chennai. The Startup Centre, Paypal Startank, Anna University Incubator, IIT-M Exploration Park, and others have created a stimulating environment for innovation, experimentation, and new idea research. Chennai has once again demonstrated that it has the ideal climate to develop into a major technology superpower.
  • Special Economic Zones: The number of Special Economic Zones (SEZ) in Chennai is the second reason. SEZs are locations where the regulations governing business and trade movement are distinct. They make it possible for businesses to function in a competitive, stress-free atmosphere. There are 55 SEZs in existence in Tamil Nadu alone. Chennai has 18 of them within its city borders, allowing plenty of room for new businesses and start-ups to thrive.

Nurturing Chennai’s Business Environment

According to the white paper, the state is attempting to engage entrepreneurs on a community level. Along with this, support systems like the venture capital and angel investors are also expected to promote SaaS growth in Chennai.

The state government has started creating a FinTech city in Chennai, according to the white paper, with Tidco publishing a plan.

While a FinTech framework is being created, the State intends to use the proposal to establish a fintech environment in order to attract both domestic and foreign financial institutions. This would turn Chennai into one of the world’s major financial services hubs, particularly a global SaaS hub. According to the white paper, it would be created with the infrastructure needed to engage financial organisations such as banks, non-banking financial sectors, financial BPO, regulatory authorities, financial market functions, and training centres.

The Inference

For years, Bengaluru’s information technology hub has been compared to Silicon Valley in the United States for start-ups in the sector. Now, Chennai is attempting to establish itself as a software as a service hub (SaaS). Chennai is home to many SaaS majors that directly compete with international titans in their respective categories. For example, Zoho Corporation, which was formed in 1996 as AdventNet Inc, released Zoho Writer, its first cloud business programme, in 2005. In this market, it goes head to head directly with competitors like Microsoft. And this is just one example, as there is an abundance of such eminent companies.

Industry leaders, on the other hand, believe that first-generation entrepreneurs in SaaS and enterprise applications tech firms have not only moved on to starting their own businesses but have also begun coaching the next generation of business owners in the town, which is critical for the sector’s continued growth.

Aspiring entrepreneurs can network with seasoned colleagues and SaaS lovers at a variety of events and meetings hosted by various organisations. Through the SaaSx event, leaders from several of these companies have recently begun a push to publicise the segment’s capabilities.

The rise of cloud services differs depending on the region and the type of cloud service. The Indian marketplace is distinct in that demand for all sorts of cloud services is constantly high. In response to Bengaluru’s e-commerce hub and Pune’s IT R&D, it is quickly emerging as India’s SaaS powerhouse. The extraordinary rate at which the Chennai start-up culture is evolving, almost ensures that it will greatly flourish in the next few years.

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