RBI auto-debit rules not helping SaaS companies, says Freshworks' Girish Mathrubootham
Freshworks Founder and CEO Girish Mahtrubootham suggested the RBI should come up with a ‘whitelist’ of companies to make it easier to do business.
Girish Mathrubootham, Chief Executive Officer at NASDAQ-listed , said, the introduction of auto-debit guidelines for recurring payments by the Reserve Bank of India (RBI) was 'not helping' Indian Software-as-a-Service (SaaS) businesses.
To counter this, he suggested that the central bank come up with a ‘whitelist’ of companies to make it easier to do business.
The guidelines, which came into effect in October, require customers to consent to every recurring transaction over Rs 5,000 and mandates a two-factor authentication at the time of payment. The move has impacted multiple industries including OTT players, SaaS companies, and other service providers working on annual or multi-year subscription models.
Freshworks became the first Indian SaaS company to go public in the US markets in September. The company said that it expected its annual revenue to be around $364.5 to $366.5 million for the FY 2021-22 and non-GAAP loss from operations to be close to $19-$21 million, during its quarterly earnings result in November.
Mathurbootham also said that the Indian information technology sector was seeing a shift from services to product-led sales, driving high velocity but shorter cycles of business.
“The DNA of service and product companies are conflicting. In the case of services, you don’t optimise for laziness and productivity. Traditional system integration projects were built for multi-year, multi-million-dollar models,” said Girish, while speaking at the Nasscom Product Conclave today.
He further added that service companies realise now that disruption is coming from cloud and SaaS companies. In order to counter this, these service companies are entering into a partnership model with product companies.
“We have executed 50-plus projects as part of our partnership with TCS over the past few quarters. We also have similar partnerships with Hexaware, Accenture, and other global companies, and this model allows us to remain a pure-play product company,” he added.
Freshworks had announced a strategic partnership with in June 2020 to build and market new-age marketing, sales, support, customer success, and ITSM solutions on top of Freshworks cloud software.
Girish added that the current war of talent in India will resolve in the next five to 10 years as the talent pool in India matures. “Do not throw money at the problem and hire from another company. Having a long-term mindset is important and we need to invest in talent,” he said.
Edited by Megha Reddy