Nowadays the use of technology alone has opened many opportunities, it is not only being applied to various industries such as Healthtech, Fintech, Agrotech or Biotech, as discussed in previous posts, but also for the creation of platforms and software that can solve everyday life problems for people and companies.
SaaS or Software as a Service has become an important pillar in the ideation of new solutions for people and companies tha before had to seek products that would meet those needs.
The data speaks for itself, the growth of SaaS companies in 2020 alone was 30% compared to prior years, it is a great opportunity today.
This happens due to the mainstreaming of these new solutions within everyone’s reach, it can be applied to B2B but also to B2C, a clear example is Zoom, the videoconferencing platform that is part of the SaaS industry that has been enhanced in the pandemic for education, for work, and also keep in touch when far away.
Let’s dive into the SaaS industry and how it has evolved in terms of investment.
What is SaaS?
As per its acronym SaaS, Software as a Service is a model that creates a software that covers a need and that is hosted in the cloud, the user can use the platform online and through a subscription in most of the cases.
Even though the industry itself is the technological development, it is divided into various sub industries, most of them for handling and managing information and work teams, logistics and operations, cybersecurity, marketing, customer service, finance and accounting, as well as human resources.
SaaS Business Advantages
There are many advantages that SaaS provides not only in terms of the service provision but in the way that it is procured and the subscription business model that these types of companies usually have.
These are some of the additional advantages:
- A specialized IT support system is not required given that most of the services are hosted in the cloud.
- The product focuses on the IT area, therefore constant innovation is enhanced and benefitted.
- For the company, many times the sale is not centered in sales meetings, it is the platform itself through the free trial and use tutorial, improving the purchase decision timeline by the customer.
Venture Capital Investment in SaaS
As far as the investment in this industry, Latin America is one with the most exponential recurring growth throughout the years. Until 2020 there were more than 1200 deals and investments of almost 2 billion USD.
This is due to the boom of SaaS companies world wide and mostly in Latin America which is where the companies that Newtopia has invested are located.
Many studies show that between 2020 and 2026 the SaaS market of Latin America will have an annual growth of 8%, a great opportunity that is the reason why this blog was written.
SaaS Cases in Latin America
Is a SaaS to comply with privacy regulations in Latin-American. This year, Brazil launched its own privacy regulation creating the need for 8M companies to comply to avoid fines. They don’t know how to do this and Wibson can solve this with one line of code. This means that a 4B dollar market has just unlocked and they are ready to take it.