India's SaaS Sector in 2025: Strategic Consolidation, AI Dominance Reshape Growth

• Indian SaaS saw strategic consolidation in 2025, with fewer but larger value domestic ($386M) and cross-border acquisitions.
• AI emerged as a "forcing function," driving vendor consolidation and demanding tangible business impact from software.
• Acquisitions shifted from market share to adding AI capabilities, data layers, and specialized talent (e.g., Exotel, Perfios, Uniphore).
• The market split into "AI-first" companies and traditional SaaS firms evolving into AI, with AI tech prioritized over vertical SaaS.
• Consolidation became a primary growth strategy for mid-sized firms, offering faster scale in an AI-driven landscape.

Why It Matters: India's 2025 SaaS market pivoted to strategic consolidation and AI integration, redefining growth and acquisitions.