US private equity firm, General Atlantic, announced its first investment in an Indian software-as-a-service (SaaS) firm this year. The company’s investment is estimated to about $10 billion and even $100 billion to focus on assisting start-ups.

Sandeep Naik, MD, General Atlantic says, “we are quite excited about SaaS companies and anticipate it will be a major theme for us in 2022.”

“Similar to how IT (information technology) services and business process outsourcing (BPO) companies created value in India over the past couple of decades, we believe SaaS companies will do that at a faster clip in the next decade,” adds Naik.

General Atlantic has invested $4.5 billion up till now in India. The Firm has several portfolios which includes edtech firms, Byju’s and Unacademy, Acko General Insurance, broking platform NoBroker and the National Stock Exchange. In 2020, the company picked up stakes in Jio Platforms Ltd and Reliance Retail Ventures.

Naik says, “we are focusing on building the next decacorns and centacorns. We are focusing on Bharat-unless you solve the needs of the core of the market, you cannot create a decacorn or a centacorn.”

Decacorns are valued about $10 billion, while centacorns are valued about $100 billion. Byju’s, the NSE, Reliance Retail and Jio Platforms are already valued at over $10 billion.

“Indian SaaS companies can create at least $300-500 billion of shareholder value over the next 7-10 years,” Naik adds.

General Atlantic joins investors Tiger Global, Accel Partners, Sequoia Capital and SoftBank Group in the Indian SaaS segment.

Sandeep Naik says, “over the last 18 months, the SaaS companies we have seen coming out of India are effectively competing on the global stage with highly innovative, first-of-a-kind solutions. They have some of the highest capital efficiency because software talent in India is significantly more affordable than hiring elsewhere.”

“We are looking at D2C brands as another theme. Digital-first brands are growing on the FMCG (fast-moving consumer goods) and personal care side,” Naik adds.

The PE firm is also seeking for investments in segments such as direct-to-consumer (D2C) brands and healthtech, financial services and edtech, which are fortified by the inclusion theme.