SaaS Power Players: Deel's Skyrocketing Success, Indian Titans Emerge, and Revolutionary Smart Meter Tech

Good morning SaaSers,

As we navigate another challenging week in the tech industry (more layoffs), the SaaS world has remained relatively quiet. Nonetheless, I've got a few spicy stories for you — so let's dive in!

• 🚀 Remote-first HR platform, Deel, has reached $295 million in annual recurring revenue, with a gross margin of 85%.

• 🇮🇳 Indian SaaS companies are expected to capture 8% of the global market in the next 5 years.

• 🇿🇦 George Municipality in South Africa is the first electricity provider to pilot a freely licensed software that automates the reading, processing, and billing of smart electricity meters.

• 🤓 Learn how to sustain your SaaS brand during an economic recession.

• 💸 Funding Rounds: Quindar ($1.5m), Argilla ($1.6m), Accord ($10m), Whalesync ($1.8m)

Deel Confirms $12B Valuation Amid Remote Work Boom

• We rarely see private companies openly sharing their financial performance. Still, Alex Buoaziz, CEO of Deel, does not shy away from boasting about his company's success.

• Last week, he announced on Twitter that Deel had achieved $295 million in annual recurring revenue (ARR) for 2022, a significant increase from the $57 million in ARR the company generated in 2021.

• Additionally, the company has been EBITDA positive since September, boasting a gross margin of 85%.

• Founded in 2019, Deel was initially an EOR (Employer of Record) set to revolutionize how businesses hire employees and contractors in other countries by streamlining the process to take "less than five minutes."

• However, since then, the company has evolved into a comprehensive global HR platform designed to compliantly manage a business's entire workforce, including direct employees, international workers, and everything in between.

• Deel has amassed a diverse and impressive clientele, boasting over 15,000 customers, including household names such as Nike, Subway, Reebok, Forever 21, and Klarna.

• Read more about it here.

Despite Market Slowdown, Indian SaaS Ecosystem Continues to Thrive

• The Indian SaaS industry is booming, with growth that puts it second only to the US in scale and maturity.

• Despite market headwinds, the total annual recurring revenue for Indian SaaS reached a staggering $12-$13 billion in 2022 (4x from 5 years ago). This number is expected to reach $35 billion by the end of 2027.

• Investment in the region also hit an all-time high of $5 billion in 2022 (6x from 5 years ago)

• They have what it takes to compete on the global stage: of the 1,600 Indian SaaS companies funded in the past five years, 14 have exceeded $100 million in annual recurring revenue (as quickly as their US counterparts).

• Encouraged by this success, over 70% of investors expect to increase their investment activity in the region.

• In 5 years, Indian SaaS companies are expected to collectively reach $35 billion in annual recurring revenue and capture about 8% of the global SaaS market.

• Source: Bain & Company.

Unleashing the Power of Open Access Energy

• The George Municipality in South Africa is pioneering the use of Open Access Energy, a freely licensed software that streamlines the reading, processing, and billing of smart electricity meters.

• The solution renders the process of "wheeling" (the delivery of electricity generated by a private operator to a buyer or off-taker via a third-party network) easier.

• This software is particularly beneficial for municipalities integrating renewable energy resources into their grid.

Here's how it works:

1. The software reads smart meters, stores the data in a shared system, and shares it with the municipality.

2. The municipality loads the data and applies its electricity tariffs to produce the final bill.

3. The final bill is sent to the ERP (Enterprise Resource Planning) system and then sent to the customer.

Read more about it here.

Strategies for Sustaining a SaaS Startup During a Recession

In times of economic downturn, reducing customer churn becomes even more critical for companies as customers may be more inclined to cancel subscriptions due to cost concerns and perceptions of value.

To combat this, here are a few tips for startups:

1. Identify potential issues and disengagement early by tracking daily active user (DAU) and monthly active user (MAU) data.

2. For accounts at risk of disengagement (those with below-average or infrequent login frequency), create opportunities for conversation through in-person sessions or feedback forms.

3. If cost is a concern for the customer, help your customer understand the value and benefits of your solution to justify the expense.

4. In addition to direct customer interactions, you can also address churn issues by revising elements of your product pages to convey value better and reinforcing the value proposition with customer success stories and case studies.

If you wish to see some examples of company websites implementing some of these tips, I link a few favorites of mine below:

• Stripe Marketplace Solution (establishes credibility with client logos + benefits + case studies)

• Mailchimp (customer value is the first thing listed + links to use the tools right away)

• Miro (emphasizes benefit right away + client logos + customer stories + number of users)

• Buffer (1 value proposition + links to get started right away based feature + customer feedback + link to help center)

• Quindar | $1.5m Seed: a web app used by satellite owners to analyze, test, and operate their constellation (link)

• Argilla | $1.6m: open-source, human-centric software to build more robust, sustainable, and accountable NLP solutions. (link)

• Accord | $10m Series A: customer collaboration platform built for high-growth sales leaders who need to hit scaling revenue targets and build a repeatable process. (link)

• Whalesync | $1.8m Pre-Seed: B2B software that allows businesses to sync data across no-code tools like Airtable, Webflow, Notion, Bubble, & Postgres. (link)

👋 That is all for this week -- thank you for reading!

Keep an eye out for next week’s update for more software news and insights.