SaaS in Brazil: A booming market
The market for Software as a Service (SaaS) is booming globally. According to experts, the Brazilian market is still underserved, yet also growing at an accelerated pace.
Software as a Service (SaaS) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. It is also known as Web-based software, on-demand software and hosted software.
The market for SaaS is booming not only globally – Gartner, for instance, predicts that SaaS technologies will reach revenue figures of U$ 278 billion by the year 2021 (2017: U$ 145). Brazil, representing an underserved market with great opportunity and still limited competition, will experience a relevant part of this growth.
Keiretsu Software with initial capital of R$ 100 million
According to experts, the Brazilian market is growing at an accelerated pace. A few months ago, one of the pioneering entrepreneurs of the Brazilian internet business, announced the creation of Keiretsu Software, a group of SaaS companies, with initial capital of R$ 100 million to acquire businesses in fast growth and with high scalability. The plan is to acquire between 40 and 70 startups by the end of 2020.
In 2017, a group of internet companies and investors launched the first edition of the “Brazil SaaS Landscape Research” (https://bit.ly/38apVw1).
Some of the key facts, according to the official release:
- Enterprise SaaS companies in Brazil grow faster than B2C or SME focused startups;
- 60% of companies take less than 6 months to recover CAC costs;
- 67% of companies have an LTV/CAC ratio superior to 3;
- Inside sales is the preferred go-to market strategy of SaaS startups; field sales and channel sales are rated the most efficient;
- 26% of the companies surveyed have a marketplace component;
- 71% of the Brazilian SaaS startups are bootstrapped and have never raised any funding.
Brazil’s most exciting SaaS startups
The research firm Tracxn, considered world’s largest platform for tracking startups and emerging innovative sectors, has published a website of SaaS startups in Brazil, listing the ten most exciting ones out of a total of 750 (observation: the last update was in august, 2019): https://tracxn.com/explore/SaaS-Startups-in-Brazil. Following a selection of 4 of the listed companies:
- Olist | Multi Channel Platform Selling for SMBs
- ContaAzul | Online accounting and invoicing solutions for SMBs
- Zoop | White-label payment solution
- Xerpa | HRMS platfrom
SMEs are the principal costumers
Another research recently published by the business group Superlógica and others, found that small and medium-sized companies (SMEs) are the ones that hire the most technology suppliers offering software as a service. According to the market study, 51.4% of customers of companies that operate on the SaaS model are SMEs.
André Baldini, CEO of Superlógica, has commented on the result: “SaaS companies that sell to SMEs understand the pain of these companies better and have managed to address real problems with solutions that make sense for the day to day of these businesses. With this, they are able to build closer relationships that allow greater experimentation.”