Cheers to India’s top 30 software firms! Their total valuation crosses $10 bn

Indian software firms are doing a commendable job as the total valuation of the nation’s top 30 enterprise software product companies has touched $10.25 billion.

The total valuation is pushing up the value of an index compiled by software products think tank iSpirt by 20%.

The number of employees in these companies has also grown by nearly 18% to over 21,200 employees, according to the report, based on an index called iSPIxB2B, comprising top 30 software product companies in India and their valuations.

Not only that, there has been a notable increase in the enterprise value per employee, showcasing shift from services heavy to product-heavy offerings.

"We see a steady growth in this space and we expect it to continue to grow nicely. The data tells us that the ecosystem is accelerating," said Dev Khare, managing director at Lightspeed India Partners Advisors, who helped put together the report for iSpirt.

Companies from Delhi dominate the index followed by Bengaluru, Chennai, Pune, and other cities. Nearly 40% of the companies in the index sell products across different enterprises but the rest are focussed on financial services, retail, media and travel.

What are the reasons for this growth? Khare is of the view that the growth in the number of enterprise software companies is due to three key reasons:
1. The growing domestic market,
2. Easier access to global customers via the internet, and
3. A growing breed of entrepreneurs who have deeper understanding of software products and industries.
4.
Khare said there is a new class of entrepreneurs coming in with a very close finger on the pulse of the needs today and creating solutions for that.

An overwhelming majority of the companies (80%) including the likes of cloud telephony company Knowlarity, customer support software maker Fresh desk and ad tech company InMobi are focused on the global market while the rest are looking to tap into the Indian market.

About 67% of the companies are domiciled in India but since 2009, majority of Indian B2B companies have started incorporating in the US and Singapore, the report noted. "The government is trying to introduce policies which make it more conducive for companies to remain domiciled in India," said Khare. In June, India's market regulator Sebi said it will launch an alternative trading platform for internet startups with relaxed norms for listing.

Most of the companies in the index have bootstrapped themselves without institutional financing in the early stage.

The report also said that about 43% were bootstrapped and most institutionally-funded companies got growth financing, rather than early-stage venture capital financing.

(Image: Indiatimes)