The Indian software-as-a-service industry is seeing an uptick in merger and acquisitions, as the artificial intelligence wave impacts smaller companies that are struggling to raise funds, unable to scale operations and are up for sale.
In addition, with AI changing the technology landscape at a rapid pace, SaaS majors are also looking to buy companies that help them ride the wave.
According to a 2025 Software Equity Group report, the global SaaS industry saw 19% more M&A deals quarter-on-quarter and 31% year-on-year in the first quarter of 2025. In India, recent deals include the acquisitions of HTTP-interception and mocking tool Requestly by Mumbai-based browser testing unicorn BrowserStack, and payment solutions platform INAI by Chargebee, a revenue growth management firm.
Two technology investors told ET that some of their portfolio companies are in talks with larger players and customers for potential acquisitions. Two SaaS founders said they are in active conversations with companies in India and overseas for acquiring them. The investors and founders did not want to come on record as the talks are ongoing.
Maneesh Bhandari, founder of M&A deal sourcing platform GrowthPal, said: "Markets are shifting faster now than before. This means that buyers need to move faster and that is bound to increase the M&A."
Funding winter, macros
Madhav Bhagat, co-founder of AI-powered contract management platform SpotDraft, said amid the funding winter, SaaS companies that would have been able to raise funding earlier will find it challenging to raise more money without a clear AI strategy.
"The smaller companies would have an even harder time, because they will need to decide where to put their resources. AI is a big area of investment, but then the amount of people available who understand that area is low. So even when we are hiring, we are seeing there is almost a 30-40% difference in salaries for the person at the same level of seniority," he explained.
A founder of a SaaS unicorn, on the condition of anonymity, said one of the reasons the companies are struggling was because of the slowing economy in the US and Europe. "If you are a smaller company and selling outside of India, it is a very tough market and that is where most of the companies have struggled. For these companies, if you don't show growth and gross margin, it becomes very hard to raise money," the founder added.
As a result, many of these companies have now come up in the market for sale.
In addition, with AI changing the technology landscape at a rapid pace, SaaS majors are also looking to buy companies that help them ride the wave.
According to a 2025 Software Equity Group report, the global SaaS industry saw 19% more M&A deals quarter-on-quarter and 31% year-on-year in the first quarter of 2025. In India, recent deals include the acquisitions of HTTP-interception and mocking tool Requestly by Mumbai-based browser testing unicorn BrowserStack, and payment solutions platform INAI by Chargebee, a revenue growth management firm.
Two technology investors told ET that some of their portfolio companies are in talks with larger players and customers for potential acquisitions. Two SaaS founders said they are in active conversations with companies in India and overseas for acquiring them. The investors and founders did not want to come on record as the talks are ongoing.
Maneesh Bhandari, founder of M&A deal sourcing platform GrowthPal, said: "Markets are shifting faster now than before. This means that buyers need to move faster and that is bound to increase the M&A."
Funding winter, macros
Madhav Bhagat, co-founder of AI-powered contract management platform SpotDraft, said amid the funding winter, SaaS companies that would have been able to raise funding earlier will find it challenging to raise more money without a clear AI strategy.
"The smaller companies would have an even harder time, because they will need to decide where to put their resources. AI is a big area of investment, but then the amount of people available who understand that area is low. So even when we are hiring, we are seeing there is almost a 30-40% difference in salaries for the person at the same level of seniority," he explained.
A founder of a SaaS unicorn, on the condition of anonymity, said one of the reasons the companies are struggling was because of the slowing economy in the US and Europe. "If you are a smaller company and selling outside of India, it is a very tough market and that is where most of the companies have struggled. For these companies, if you don't show growth and gross margin, it becomes very hard to raise money," the founder added.
As a result, many of these companies have now come up in the market for sale.
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