70% Startups Expect Enterprise Tech To Propel Hypergrowth, Valuations: SAP–Zinnov Study
Indian startups are increasingly witnessing enhanced benefits of adopting a robust digital core on the cloud, a study by software and technology company SAP India, in collaboration with consulting firm Zinnov Digital, shows. More than 80% startups in the enterprise tech, health tech, retail, logistics, and auto tech sectors have reported a considerable increase in revenue, highlighting the positive effects of enterprise applications on startup performance and success.
The study of 115 Indian startups also suggests that these companies will continue to invest in enterprise technology platforms, driven by their ability to deliver business outcomes and return on investment (ROI). Top-line acceleration and bottom-line control, quick revenue recognition, and handling complex invoicing based on contracts and consumption for various service lines are a few of the major advantages of enterprise applications.
“Indian startups today require adequate tech infrastructure to help them diversify business, scaling up operations and acquisition, and retention of the right talent. Mission-critical enterprise resource planning (ERP) systems on cloud are powerful enablers that provide valuable insights and direction to navigate any challenges, and accomplish their goals, including attracting investors, fair valuations and retaining a competitive edge,” said Sanket Deodhar, vice president of digital natives and startups, SAP India.
Below are some key findings from the study:
Best-Run Startups Run On Modern Digital Core
Technology remains centre stage, influencing how startups grow sustainably.
Approximately 74% of Indian startups have reported direct benefits from implementing enterprise applications.
24% of startups believe that achieving maturity in their business model, driven by robust technological capabilities and scalable operations, plays a crucial role in attracting investors.
About 68% of respondents reported a strong growth in revenue after adopting enterprise technology solutions, leading to an increase in valuations.
Future Enabler: Enterprise Tech On The Cloud
Startups will continue to prioritise enterprise technology as a critical aspect of their investment to navigate growth and development.
37% of the startups, in the study, plan to increase their spending on enterprise applications by more than 15% in 2023.
81% of startups cited automation and standardisation of processes across divisions, with faster customisations cited as the primary benefit being derived by hosting enterprise applications on the cloud.
Adoption across the public cloud is set to grow 2X, whereas the private cloud promises around 50% increase in adoption.
Addressing Challenges, Indian Startups Stay Resilient
Indian startups continue to grow, and there is no sign of investments slowing down for high-performing startups in the coming years.
More than 75% of startups point towards metrics such as revenue generated in the past year, product and service margins, and market share based on traction for determining valuations.
81% of startups reported customer sentiment as one of their biggest business concerns.
70% of respondents said that partner evaluation and lack of in-house knowledge remain the top challenges for startups while implementing enterprise application solutions.
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