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Internet economy in the country grew 50% year-on-year last year, says RedSeer report

SaaS market size stood at $3.5 Bn in FY21 and is expected to grow to $8 Bn by FY26, at a CAGR of 18%

Expect another 70 tech IPOs in the country by 2025: RedSeer report

The Indian internet economy will reach $1 Tn by 2030, a RedSeer report says.

Besides, it predicts that the Indian startup ecosystem will make ways for another 70 tech IPOs in the country by 2025. The report says that this ‘surge‘ in tech IPOs is mainly powered by accelerated digitisation, government initiatives for startups, increasing local investors with high equity, and private equity funding in tech companies.

The report also points to the growing tech adoption in the B2B space. It estimates that the SaaS market size stood at $3.5 Bn in FY21 and is expected to grow to $8 Bn by FY26, at a CAGR of 18%.

Shedding more light on this, the report further says that the internet economy in the country grew more than 50% year-on-year (YoY) in 2021, mainly fueled by increasing internet penetration, high speed internet, ballooning online shopping and digital content consumption. 

While Covid battered the Indian economy, it particularly hit the key internet sectors of ehealth, foodtech, online mobility, among others. The report adds that these sectors re-emerged much stronger and ‘shocked everyone with their post-Covid recovery.’ This, as per the report, was propelled by an expanding and maturing user base. 

The RedSeer report also heaped praises on the logistics sector, which has come of age in the country. It stated that a new class of innovative logistics startups are improving the way goods are transported across the country at an unprecedented pace and scale. 

These new age logistics startups, according to the report, were challenging the old world order – providing reliable delivery services at a fraction of the cost what the traditional logistics providers are charging.

RedSeer CEO, Anil Kumar, had recently stated that, “India’s journey to a $1 trillion consumer internet economy has been a unique story of multiple internet sectors…coming together to create a strong foundation for a consumption-led economy.” He had further said, “The ongoing journey from digital-first to digital forward was a result of multiple internet sectors having shown strong momentum post COVID.”

The report also points out the compartmentalisation of the Indian population with regards to the internet boom. It says that the first segment comprised 80-100 Mn, who draw an annual income of more than $12K and expect high quality services. 

This was followed by a second cohort that comprises 100-200 Mn price conscious Indians with an annual income of $5K-12K. 

The third segment, according to RedSeer, comprises 400-500 Mn population in the rural segment and Tier 2 cities that draw an annual income of less than $5K. This, the reports, says is the biggest and the most difficult group to reach. 

According to RedSeer, many vernacular first apps have deployed their services towards the third group and have been able to address a large Total Available Market (TAM) for themselves. Additionally, omnichannel approaches and verticalised super apps are also being deployed to further serve the needs of this audience. 

2021 saw a great run for the Indian startup ecosystem as 1,583 deals were inked and more than $42 Bn were raised by startups. Add to that, 42 new unicorns were minted last year, taking the total tally to 84.

A new unicorn in every nine days: With 42 new unicorns last year, India saw a new unicorn startup every nine days in 2021, taking the total tally to 84. 

Add to that, as many as 11 Indian startups went public, reflecting an overall positive sentiment around the Indian startups.

Investor count also went up by two times in 2021: Unique investor count surged by nearly 123% from 1,114 to 2,487 last year. 

The report points to an overall positive sentiment in the Indian market and the booming internet economy. If startups can leverage this momentum with path-breaking innovation, the road appears all rosy for the years to come.