Aug 29, 2025 · 1h 19m · neon-show
7 Myths About Selling B2B SaaS In India ft Unicommerce Founder Kapil Makhija
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Unicommerce CEO Kapil Makhija joins host Siddharth Ahluwalia on The Neon Show to deliver a comprehensive masterclass on scaling, operating, and publicly listing a profitable B2B enterprise SaaS company in India. Kapil debunks prevalent software market myths, unpacks Unicommerce's product evolution and IPO journey, and provides actionable frameworks for tech entrepreneurs navigating sustainable compounding, AI integration, and domestic market dynamics.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Siddhartha as informed peer 4.7 Guest teaching 5.7 Guest disagreement 1.7 Siddhartha pushing back 1.9
speaking balance: gold is Siddhartha, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 39:05 Rejection of AI Replacing SaaS
Kapil outright dismisses the popular narrative that AI will kill SaaS software, asserting it serves as an enabler and interface layer rather than an existential threat.
Hardest push from Siddhartha ▶ 59:31 Pushback on India-Only Market VelocityThe host directly challenges the viability of India-only SaaS scale by contrasting rapid Western $0-100M ARR growth stories with the decades-long timeline required for Indian SaaS companies.
Biggest teaching moment ▶ 13:30 Macro Shipment Numbers and SpreadsheetsKapil contextualizes India's nascence by comparing its 4.5 billion annual shipments against China's 130 billion, demonstrating that manual Excel sheets, not SaaS competitors, represent the primary target.
Siddhartha holds their own ▶ 1:14:26 Host Cloud Spend and Margin BenchmarkThe host demonstrates deep SaaS investor expertise by laying out exact cloud spend percentages and overall technology cost benchmarks that eat into operating margins.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Siddhartha as informed peer | Guest teaching | Guest disagreement | Siddhartha pushing back | Why |
|---|---|---|---|---|---|---|
| Preview: Unicommerce's Scale and B2B SaaS Insights | 5 | 3 | 1 | 2 | The host sets up the episode context with revenue and valuation data on Unicommerce and frames the core discussion around building SaaS in India. The guest provides initial soundbites on ARR and product ubiquity in a collaborative preview dynamic. | |
| Market Creation, Product Evolution, and Sector Focus | 4 | 6 | 2 | 1 | Host quotes Makhija's philosophies on TAM and market depth in India. Makhija schools the host on the evolution of Indian e-commerce use cases from distributor onboarding to quick commerce and explain why depth beats width. | |
| Kapil Makhija's Journey and Unicommerce's Milestones | 4 | 6 | 1 | 1 | Host asks for the founding story and inflection points. Makhija gives a detailed masterclass detailing how Unicommerce shifted from SMB to enterprise in 2017, achieved profitability, and benefited from pandemic tailwinds. | |
| The E-commerce Landscape and Evangelizing Software | 4 | 7 | 2 | 1 | Host inquires about market penetration, prompting Makhija to compare India's 4.5 billion shipments to China's 130 billion. He clarifies that their primary competitor is not other software, but manual spreadsheets and legacy workflows. | |
| Strategic Acquisitions and Path to ₹1,000 Crore Revenue | 5 | 5 | 1 | 2 | Host asks specific ARR breakdowns and growth levers toward ₹1,000 crore revenue. Makhija outlines a structured 4-pillar growth strategy combining market indexing, new products, organic/inorganic expansion, and international GTM. | |
| The IPO Journey and Transitioning to Public Markets | 4 | 6 | 1 | 1 | Host probes the decision-making and roadshow process for an Indian main-board IPO. Makhija breaks down the fundamental differences in valuation mindset between private VC (TAM/potential) and public market investors (predictability, corporate governance, fiscal discipline). | |
| Customer Metrics, Unit Economics, and Diversification | 6 | 4 | 1 | 2 | Host performs immediate back-of-the-envelope calculations on ACVs, per-item monetization, and customer concentration limits. Makhija validates the math and explains their customer tier structure. | |
| Playbook for Transitioning from SMB to Enterprise | 4 | 6 | 1 | 1 | Host asks for the tactical playbook on graduating from SMB to enterprise. Makhija provides a thorough breakdown of enterprise product differentiation (e.g. SLA prioritization for Amazon Prime orders in WMS) and retention-driven SaaS metrics. | |
| Debunking Myths About Selling SaaS to Indian Enterprises | 5 | 7 | 4 | 3 | Host presents common ecosystem tropes regarding Indian clients refusing to pay and demanding infinite customization. Makhija firmly refutes these premises, arguing that Indian enterprises pay well when software demonstrates measurable ROI. | |
| The Role of AI in Enterprise SaaS Evolution | 4 | 6 | 3 | 2 | Host asks if AI will render traditional SaaS obsolete. Makhija firmly disagrees, illustrating concrete AI augmentations in Unicommerce products like natural language query processing and RTO prediction algorithms. | |
| Leadership Mindset, Culture, and Sustainable Compounding | 4 | 5 | 1 | 2 | Host queries whether early-stage startups should hire external CEOs. Makhija reflects on founder vs. CEO mindsets, building sustainable compounding cultures, and maintaining customer intimacy. | |
| E-commerce Fulfillment Models and Cap Table Overview | 5 | 6 | 1 | 1 | Host asks for cap table and market share data. Makhija delivers an authoritative breakdown of the three retail fulfillment models (outright, fulfilled-by, dropship) and Unicommerce's 30-35% share of the dropship segment. | |
| The Rise of Quick Commerce and Omnichannel Dynamics | 5 | 6 | 2 | 3 | Host asks if quick commerce will eventually cannibalize or overtake general e-commerce. Makhija reframes the question into an omnichannel thesis, demonstrating that modern retail demands integrated inventory across all retail formats. | |
| Preparing SaaS Startups for an Indian IPO | 5 | 5 | 1 | 2 | Host probes whether Indian public markets specifically favor SaaS businesses. Makhija explains that Indian public investors look for fundamental financial health, predictable unit economics, and governance rather than buzzwords. | |
| The Potential for Billion-Dollar India-Focused SaaS | 6 | 6 | 3 | 4 | Host challenges whether an India-only SaaS model can create a billion-dollar ARR business, comparing local timelines with rapid Western AI startups. Makhija defends the long-term compounding potential of domestic market maturation. | |
| Tactical Playbook and Mistakes to Avoid for SaaS Founders | 4 | 6 | 2 | 1 | Host asks for specific GTM playbooks and founder mistakes. Makhija gives concrete operational advice: avoiding TAM FOMO, focusing on cash cows instead of running 10 concurrent experiments, and transitioning founder-led sales to specialized teams. | |
| Non-Metro Demand, Cloud Margins, and Value vs Price | 6 | 6 | 2 | 3 | Host points out that SaaS companies usually spend 10-15% of revenue on cloud and 20-25% on total tech, and notes the trap of competing on price. Makhija agrees, emphasizing gross margin discipline and pricing at a 50% premium based on delivered value. |
Statements from this episode (33)
Ahluwalia: Unicommerce generates ₹135 crore revenue entirely from India
“Today I think the revenue as I saw is like, 135 crores as declared on the public market. You are valued somewhere between 1100 to 1300 crores in public markets, and your entire revenue comes from India.”
Makhija: Indian SaaS founders should target depth over initial TAM size
“You need to start small because India rewards depth more than width. So you need to go deep. Solve for the pain points. The way we have built is to listen deeply to our customers and continue to evolve as their needs evolve. And through this journey, the produ…”
Makhija: Unicommerce processes 20 million quick commerce order items annually
“Today our quick commerce offering is processing twenty million order items on an annual basis in a very short time.”
Makhija: Unicommerce has been PAT positive every fiscal year since FY21
“We just had one year of PAT negative in FYI 20 because of ESOP expense, which is a non-cash expense, and we have been PAT positive since FYI 21.”
Makhija: Unicommerce processes 1 billion transactions, 30% of Indian e-commerce volume
“Now Unicommerce now processing a billion transactions, about 25 to 30% of India's e-commerce volumes is that standard back, a very strong, solid backbone for e-commerce operations for any brand to make sure that they're able to navigate the complexity.”
Makhija: Unicommerce gets equal revenue from traditional and digital-first brands
“While the perception may be that we get a lot of revenues from digital first brands, actually we get almost equal revenues from digital first and traditional brands.”
Makhija: India processed 4.5 billion shipments last year versus China's 130 billion
“India last year processed about four to 4.5 billion shipments. China did one thirty billion shipments.”
Makhija: Unicommerce's core addressable market is $260M; $85M spent on software
“So the time for our Core, Uniwear product, OMS and WMS is about two sixty million dollars of which eighty five million dollars is on a software of which we have a sizable share.”
Makhija: Indian brands prefer single-vendor software to prevent vendor blame games
“In a market like India, brands prefer to have everything under a single umbrella. They effectively want a single neck to catch that because today the biggest headache in a brand's life is that if something goes wrong, they go and talk to their vendors, vendor …”
Makhija: Unicommerce hit ₹45 crore Q4 revenue, ₹180 crore run rate
“If you look at our QFOR results we had published about 45 crores in QFOR revenues. That's about a one 80 crore revenue run rate for us.”
Makhija: Unicommerce will eventually reach ₹1,000 crore in annual revenue
“So as we do well, execute well on all these four levers, We, ah, like in, in some time, which will hit the thousand crore revenue as well.”
Makhija: Infosys had just ₹14 crore in revenue at its 1993 IPO
“Can you imagine at what scale when Infosys went public in 93, at what scale would they be? They had 14 crores in revenue.”
Makhija: Unicommerce raised no primary capital between 2015 Snapdeal acquisition and IPO
“As a business, we had never raised primary, like post the acquisition of by Snapdeal in 2015. The company has not raised any money. We have been profitable for many years.”
Makhija: Public markets prioritize governance and financial predictability over TAM
“When I, before going to the road shows, when I talked to my counterparts who would raise money in the private market, the conversations are a lot different, a lot about time, a lot about good potential un sort of undiscovered time, et cetera. Here it's a lot a…”
Makhija: Enterprise clients contribute 90% of Unicommerce's Uniware product revenue
“In due course of time, we've realized, like today, enterprise businesses for Univare contribute 90% of our revenues.”
Makhija: Unicommerce's top 10 customer revenue concentration fell from 50% to 20%
“Today, top 10 customers constitute only 20% of our revenue. This number five years ago used to be 50% plus.”
Makhija: Unicommerce serves 6,000 SMBs despite enterprise driving 90% of revenue
“We still have 6000, nearly 6000 small and medium businesses on our platform of the 7000 total customers that we have.”
Makhija: Indian enterprises are paying strong ACVs to domestic SaaS companies
“I know many examples like Exotel, Davenbox, Yellow, they are able to build or get large customer contracts in India, spot draft as you were talking about. So they have been able to sign up enterprises in India, which are paying good ACVs to them. And that mark…”
Makhija: Indian enterprises prefer configurable SaaS platforms over custom software code
“I think there's the second myth that is there, the Indian customers Want endless customization. That's not the case. I think customers are also realizing the power of platform. We have built this like a platform. We've made sure that the platform is configurab…”
Makhija: Unicommerce is expanding into Southeast Asia and the Middle East
“We built in India, built for India, but we are now expanding to the world. We've taken into Southeast Asia, Middle East.”
Makhija: Unicommerce is launching a natural language text interface for order processing
“Today, we are we are in the process of launching a very simple interface wherein for processing the order today user has to do many clicks.
We are going to give a text interface that through which they can just give the instruction, a natural language interfac…”
Makhija: I have spent more time running Unicommerce than its founders
“Now, virtually I have spent 10 years, more than a decade here. So I have virtually operated like a founder, spend more time than the founders themselves.”
Makhija: The dropship model grew to half of India's e-commerce market
“Dropship model actually pre-pandemic was about 10, 12%, has now become nearly half the e-commerce market.”
Makhija: Unicommerce handles a 30% to 35% share of India's dropship market
“Of the dropship market, we are doing about 30% of the market already like the, of the four to 4.5 billion shipments that I talked about, half market is dropship, about two billion
Shipments.
each shipment is about 1.5 items, three billion items, of which we a…”
Makhija: Acevector promoters hold 37% of Unicommerce; SoftBank invested via balance sheet
“About 30, 37% is held by the promoters.
the second, then it's a. Which includes you and?
No, promoters are Kunal, Rohit, Acevector, which is our parent company.
then it is SoftBank which is through their balance sheet.
It's not through the Vision Fund.”
Makhija: Tier 3 Indian cities are driving over 20% of e-commerce growth
“In fact, we published a report yesterday itself where tier three constituted about 20% plus growth in the overall e-commerce growth.”
Makhija: Unicommerce is the only profitable player among its top five rivals
“Although in our ecosystem, we are the only profitable player as of now amongst the top five players”
Makhija: An India-focused SaaS company will eventually reach $1 billion in revenue
“I firmly believe that there can be a company that can be created. Where we are getting billion dollars in, in revenues.”
Makhija: Newer Indian SaaS startups reach $10M ARR faster than Unicommerce did
“It took us probably 10 years to get to a ten million ARR, but now I'm seeing examples of companies focused on India who are able to achieve the ten million mark sooner.”
Makhija: 85% of the Indian commercial market still operates on Microsoft Excel
“85% of the market still operates on Excel.”
Makhija: Outbound remains the largest customer acquisition channel for Unicommerce
“Our earlier journey was a lot focused on outbound, and that still is the largest channel for us.”