SaaS for Impact in Emerging Markets

Next Billion Tech

I am fascinated by SaaS, platforms, and marketplaces, and I want to build and invest in SaaS in the context of Indonesia and emerging markets. Especially, seeing the landscape, SaaS, as well as Marketplaces can create impact for M/SMEs.

Why not replicate the success of SaaS to the impact space in emerging markets, creating access to products and services, reducing friction, improving efficiencies, and productivity?

A few weeks ago, I attended the report launch on SaaS Wave in Indonesia, created by Innovation Factory and ravenry. I made my notes, which are as follows:

  • Comparison to B2C: In Indonesia, businesses and M/SMEs compare SaaS products with consumer products - need to have similar UI/ UX to consumer apps. The expectation is high now. But this consumer apps wave is helping to adopt mobile SaaS solutions. 

  • Lower value per client in Indonesia and emerging markets comparing it with the US and many times here they prefer it for free.

  • Pay on Demand and Pay as you go - SaaS model works here. The business consumer is learning about the subscription model from the consumer apps, so it is making SaaS adoption easy. 

  • Labor costs are low, and businesses like spoon-feeding in Indonesia. Hence, companies like to either use a cheap human resource or want extensive support and services. 

  • Customer Value Creation: Clarity on business customer value is not there for most of the SaaS solutions 

  • M/SMEs or Big Enterprise Customers: Fertile ground to sell mobile SaaS to M/SMEs, Koperasi, and Warungs. Big banks, conglomerates have their legacy systems - tough to move them. Hence, it is preferred to sell to M/SMEs and startups  

  • Product Packaging needs affordable and accessible - make sense for unit economics but need to design it differently.

  • Modularising it vs. bundled type of service: Modularising is a preferred way to sell the SaaS to M/SMEs as the capacity to pay bundle services/products is low 

  • Bundle it with physical and hardware products - like iPad. As the M/SME owners find hardware product more relatable and tangible, so bundling up with hardware products can help accelerate the sales 

  • Free software: It is important to note that trust is low for free software in Indonesia, as the M/SMEs are protective of their work 

  • What's the potential in SaaS in Indonesia and emerging markets?

    • SaaS businesses have a 70-80% margin and have recurring nature. So, by the kind of the company, it looks impressive on paper 

    • SaaS is much better than marketplaces in terms of ARR and ACV 

    • M/SME space is exciting and a lot to grow - on-premise solutions. - healthcare and education in terms of verticalisation (not sure it's a word) 

    • CAC and LTV problem - very little value that customers can add here. CAC: LTV needs to be above 1:3 

    • Go to Market Fit is more critical than product-market fit, i.e., How secure is your sales, pricing, and product, GTM 

    • Platform solution vs. Point solution - compare it with Uber in the US and Go Jek in Indonesia - start with one niche, build the capabilities and creativity to enter into the adjacent markets  

Please use this link to read the full report.

I am continuously looking for SaaS solutions that can solve inefficiencies and productivity issues in the M/SMEs. If you are building one or investing in one in Indonesia or SEA, please do write to me, I would love to learn more from you.

With Love,



"first followers" is founded by Sagar Tandon, a founding member at Moonshot Ventures. You can reach him at

Occasionally, he blogs about the responsible investing, tech for good, venture capital, investment thesis, conscious capitalism, collaborative consumption, community, and humane lifestyle.