Key Takeaways

The "build-in-India for the US" model is well-established in the domestic SaaS industry and has helped Indian SaaS make a mark globally
Most of the Indian SaaS firms operating in the HR vertical, however, are creating their own playbook, and building for Indian customers first
Even with a strong domestic foundation in place, they are choosing to expand into other developing markets, including Southeast Asia and the Middle East instead of the US
The final destination is, of course, the developed economies—especially the US, the single-largest SaaS market in the world.

When Hyderabad-based Keka HR secured a $57 million Series A funding round from WestBridge Capital in November 2022, it made India’s startup space sit up and take notice. For one, it was the highest Series A fundraise that India’s software-as-a-service (SaaS) space had ever seen. More impressively, the HR-focused SaaS platform pulled this off at a time when many Indian startups were losing toes, if not limbs, to frostbite after a year-long funding winter.

It was a moment of vindication for Vijay Yalamanchili, Keka’s founder, who had thus far bootstrapped the seven-year-old HR SaaS upstart. It also validated a conscious decision Yalamanchili made that flew in the face of established Indian SaaS wisdom—focusing on the Indian market.

Buoyed by a cost arbitrage over their Western peers and with an appetite for the higher revenues on offer overseas, Indian SaaS companies have usually made a beeline for the US market. The most prominent examples of this are Freshworks and Zoho, both of which began in Chennai and count the US as their biggest market.

Building in India for Indian companies hasn’t been easy, especially with Keka’s focus on small and medium businesses (SMBs). “It is tough to rely only on the Indian market. Pricing is extremely low,” Yalamanchili readily admits to The CapTable.

Even after achieving significant scale in India—it crossed 5,500 customers in 2021—Keka didn’t use its Series A funding as a wedge to pry open the US market. Instead, it has continued to focus on growing its footprint in developing markets such as the Middle East and Southeast Asia, which it entered in the months leading up to its Series A close.