If digital transformation was the big trend in 2020 and 2021, the biggest boost was seen for the software as a service sector. As businesses turned to SaaS tools to manage their operations, the market for startups developing these software exploded.
Of course, while SaaS technology was always seen as the future, amid the pandemic, the shift towards distributed workforces, digital operations and remote workplaces meant all manner of businesses adopted digital processes. A Statista report claims companies on average use 110 SaaS applications in 2021.
In the Indian market too, startups unlocked a big opportunity. A report by SaaSBOOMi and McKinsey estimates the Indian SaaS sector will generate revenues between $50 Bn and $70 Bn by 2030 and dominate 4%-6% of the global market.
As companies add more and more SaaS applications to their operations, there’s a different complexity arising. Now, businesses need SaaS tools to manage their various SaaS subscriptions. That’s where Hyderabad and San Francisco-based SaaS management platform Zluri is looking to break through.
After a $2 Mn seed round in January 2021, Zluri has raised $10 Mn in a Series A round of funding led by MassMutual Ventures with participation from existing investors, Endiya Partners and Kalaari Capital. Founded by Sethu Meenakshisundaram, Ritish Reddy, and Chaithanya Yambari, who had previously worked alongside the founding team of gaming and simulation software company KNOLSKAPE.
The trio started Zluri in October 2020 in order to capitalise on the growing SaaS market and the need for businesses to manage their costs in relation to SaaS applications. With its latest fundraise, the company plans to use the additional capital to hire more talent, continue its growth momentum and add to its product’s capabilities.
Zluri: A SaaS Tool To Manage SaaS Subscriptions
The core idea behind Zluri is that while businesses find it easy to buy and subscribe to SaaS applications, managing these multiple applications in one central place gives them better visibility on costs and where they can be saved. This is particularly true for companies which have huge teams and a large volume of SaaS tools but Zluri is targeting companies with over 250 employees for its SaaS management platform.
Cofounder Reddy said that the rapid growth in the SaaS management category can be attributed to the product innovation and customer support, where Zluri does custom integrations in 36 hours, whereas competitors have very rigid offerings. “We have made significant investments into our one-click automation engine, which helps IT teams streamline and automate workflows across the organisation thus helping them manage, optimise and secure their technology stacks effectively,” he added.
The SaaS management platform essentially enables businesses to get visibility on SaaS spending, discover alternatives for existing tools, manage payments and optimise the spending for tools that are used less frequently.
Besides this, the startup enables companies to onboard secure SaaS applications from a single dashboard, and Zluri claims to have the largest library of over 600 in-depth direct integrations.
Reddy told us that IT teams can easily onboard and off-board employees from various SaaS tools with a single click, which typically allows companies to save not just costs associated with onboarding but also reduce the risk of data breaches and leaks.
“IT admins can eliminate potential critical leaks from their operations. You will find that many employees have access to CRM systems and other dashboards even after leaving the company.”
Zluri also has a customer advisory council that keeps the product team informed about the evolving needs of customers. Businesses that use Zluri can share requirements with the council, which creates a funnel for the product roadmap with relevant features.
The primary revenue stream for Zluri is the subscription fee and it’s charged basis per user per month. Besides this, it also has other minor revenue streams such as charging a commission from companies on SaaS subscription savings, if the customers opt for this add-on.
Chasing SaaS-First Companies
Zluri started commercially selling the product in June 2021 and Reddy claimed the company has grown 100% month-on-month and has a “huge pipeline” in terms of deal value as well. The startup claims to have added 100 new customers from North American and Asian markets in the past year and includes fellow startups such as Chargebee, MoEngage, Guesty and Whatfix as customers.
Interestingly, Chennai-based Chargebee which turned unicorn last year, is also a competitor to Zluri. Among the other startups in the SaaS management space are the likes of OneTool, BetterCloud, Torii, Blissfully, Vendor. The fact is that the SaaS management market is very much global in nature, with companies having clients outside their home markets.
“A significant portion of our business comes from outside of India today. I would say 60% of our business today is mostly outside India. The average contract values (ACVs) are higher in the US and Europe and we see a strong product market fit in these markets,” Zluri cofounder Reddy said.
The SaaS Talent Wars
Reddy told Inc42 that Zluri plans to double its team size in core markets such as Asia and North America. For the first few months, the three founders relied on their personal network in the tech community to build the early team. But now, given that the company is looking to scale up and expand aggressively, the focus is on bringing the right talent on board.
But this is one of the major challenges for Zluri, just as it has been for the tech startup ecosystem at large, Reddy admitted. “There is a talent crunch out there. Being extremely candid I would say it’s a war for talent. Besides the higher remuneration, we have to spend months hiring for one position. The problem here is the amount of time that it takes or effort it takes to hire one single resource has gone up exponentially in the field compared to what it was.”
As a solution to this long hiring cycle, Zluri is going back to the example of how it built its initial team, by tapping in talent in the first degree and second degree networks of its key employees. Besides this all employees are given ESOPs with a 100% coverage across the company for stock options, Reddy added.
The company currently has 55 employees and over the next year, it will look to double this with a focus on data scientists, engineers, senior IT operations, and marketing. Reddy added that while it’s a war of talent in tech with companies trying to outbid each other, there’s a dearth of talent in SaaS marketing because there is not a precedent in India for this category. This also makes selling in India slightly harder than selling abroad.
SaaS Adoption In India
Reddy told us that in India, companies born between 2010 and 2020 have embraced more SaaS tools compared to older companies. These SaaS-first companies have shown significant adoption and also they have reached a point where managing SaaS applications has been moved from being a mere problem to a pain point in their business.
These new-age companies in India are actively scouting for SaaS management tools, but Reddy added that the sales cycles are still typically longer for the Indian market, where the approach is education-driven. On the other hand, the US market is more mature in this regard.
But the Indian market is definitely maturing rapidly enough for Zluri to be bullish about selling to Indian companies. “You can see the number of unicorns that are growing so fast and using a bunch of tools. You can see so many acquisitions happening with parallel tech stacks coming together.”
Managing these multiple stacks for such companies or helping unicorns get a grip on their costs is something Zluri can fix, Reddy added. In the next couple of quarters, Zluri sees SaaS management becoming a mainstream and go-to solution for Indian startups.