SaaS startups shift focus to tier 2, 3 cities

SAAS (SOFTWARE AS a Service) startups, once primarily targeting global markets, are increasingly turning their attention to India's tier 2 and 3 cities to fuel growth.

- S SHANTHI

These regions are emerging as hotspots for enterprise technology adoption, driven by a surge in local entrepreneurship and a growing migration of talent away from metropolitan hubs.

"Investors are now showing greater confidence in India-centric SaaS models as they see strong growth in tier II and III cities," said Brijesh Damodaran Nair, founding partner at Auxano Capital.

The pandemic accelerated the shift towards distributed work setups, with employees relocating to smaller cities. Lower operational costs in these regions make SaaS solutions particularly attractive for businesses seeking efficiency at scale.