The SaaS scenario has stood out in recent years, especially in Brazil, where the B2B model establishes itself as a dominant approach.
Driven by considerable growth potential and demand, the global software-as-a-service market is projected to reach the $716 billion mark by 2028, according to a Fortune Business Insights report.
We spoke to Guilherme Quandt, Executive Head of Strategy at Softplan's construction unit, to get a detailed analysis of why SaaS B2B model stand out in the country, as well as understand its particularities, challenges and opportunities. Check out!
Why is the SaaS B2B model prominent in the country?
It is no exaggeration to say that the SaaS market in Brazil has a vocation for B2B. Just look at the data from Report Founders Overview 2023, carried out by Ace Ventures, who say that 76,9% of emerging companies in the country have sales to the corporate sector as their main model.
Quandt explains that, “in practice, the model brings advantages to both suppliers and customers”. For those who supply it, it represents a predictable, scalable and recurring source of revenue, providing a solid financial basis for the company's continued growth and development.
For customers, eliminates the need for investments in hardware and infrastructure, as well as offering the convenience of a monthly subscription-based payment model. This contrasts with the traditional approach, where companies need to have significant resources to acquire and maintain their own in-house solutions.
SaaS B2B vs SaaS B2C
When comparing SaaS models aimed at companies (B2B) and end consumers (B2C), it is important to highlight that Both have different characteristics and meet different market demands. Quandt cites two major factors that differentiate the models.
Scale and customer base
In the B2C context, it is common to find businesses that depend on a massive customer base to sustain themselves. Examples such as Uber and iFood illustrate this, with millions of users using these platforms regularly.
With lower average tickets, the economic viability of a B2C business often requires a large volume of transactions to remain sustainable.
On the other hand, in the B2B model, it is possible to build a solid company with a relatively smaller customer base. Due to higher average tickets and the nature of business relationships, a limited number of customers can generate substantial, predictable revenue.
This allows for a more selective approach to customer acquisition and provides a solid foundation for sustainable growth.
Structure and capital for scalability
The development of a B2C business often requires a robust infrastructure to handle the massive volume of transactions and customer interactions. This may require significant investments in technology, customer support, and marketing to reach and maintain a large user base.
On the other hand, a company focused on B2B can be scaled with a leaner structure and a comparatively smaller volume of capital. Longer sales cycles and more direct customer relationships allow for a more focused and efficient approach to business expansion.
Additionally, support and customization needs are more manageable in a B2B environment, which contributes to a more efficient and profitable operation.
Challenges of the SaaS B2B business model
Although the SaaS B2B model presents a promising scenario in Brazil, with high demand and natural scalability, the journey to success is not without challenges.
However, it is worth saying that, in a way, these points of attention are fundamental to the success and sustainability of the business, requiring a careful focus and a proactive approach to overcome them.
Below we present the main challenges:
Identify the ideal customer profile
Quandt reinforces that “identifying the ideal customer profile is not just a trivial task, but a crucial element for the direction of all areas of the company”.
In practice, this involves deeply understanding consumers’ needs and challenges. This understanding, in turn, should influence marketing strategies, sales approaches, customer service and product development.
Dedicating energy to defining this profile is essential to align the efforts of all teams and ensure an offer that truly meets market demands.
Define a clear strategy
Having a clear and concise strategy is essential to guide the growth and direction of the business. A well-defined strategy not only outlines the target market and growth goals, but also provides a shared vision for the entire team.
This clarity facilitates internal and external communication, in addition to providing a guide for making agile and informed decisions.
Knowing how to say no when necessary
Especially in the early stages, it is common for additional opportunities to arise that can divert the company's attention and resources. In this sense, knowing how to say no is essential to maintain focus and coherence with the defined strategy.
This does not mean following the strategy rigidly, but rather maintaining the necessary flexibility for relevant adjustments when necessary. “It is important to constantly assess whether the strategy is aligned with market demands and, if necessary, make the relevant adjustments to maintain relevance and competitiveness”, reinforces Quandt.
Complete your reading: Startup exit: how do you know if the time has really come?
B2B SaaS and featured industries
For Quandt, the technological maturity of each sector has been a determining factor in the adoption and growth of B2B SaaS.
“While traditionally less technological sectors are seeking to 'catch up', new layers of technology are enabling scalability and innovation in various segments of the economy.”
In the short term, technology adoption will be driven by less developed sectors, while in the medium and long term, the tecnologic innovation will continue to drive growth and efficiency across all market segments.
Taking this into consideration, we can mention some sectors that have stood out, with data that justify these statuses.
Education
Online teaching platforms, learning management tools and gamification solutions are personalizing teaching and optimizing educational management.
To give you an idea, a study by HolonIQ1, an advanced research platform in the areas of education, climate, technology and health, indicates that the global EdTech market expected to reach 404,08 billion dollars by 2025.
Financial
The digitalization of banking services grows with the demand for digital banks and fintechs. These solutions offer customers more options, convenience and security when managing their finances. According to the study Global Fintech 2023: Reimagining the Future of Finance, Fintechs are expected to earn 1,5 trillion dollars globally by 2030.
Health and wellness
Brazil has one of the largest health and wellness technology markets in Latin America. According to the HealthTech Report 2023, carried out by Distrito, 61,7% of all Latin American healthtechs are in Brazil.
For Guilherme, in fact, healthtechs are arousing the interest of large corporations to But and investment funds. This demonstrates intense activity in the consolidation and expansion of this type of solutions.
Agribusiness
According to AgTech Mining Report, a survey also carried out by Distrito, investments in new businesses specialized in technology for agriculture have already exceeded 160 million dollars.
Digital agriculture is growing with the use of drones, sensors and software to optimize production. This allows farmers to make more accurate decisions about managing their crops, resulting in greater productivity and sustainability.
Construction
Civil construction is one of the sectors that has remained behind for many years. Quandt even recalls a study carried out by McKinsey in 2016 that provided a ranking of digital transformation in several segments, ratifying this status.
However, over the years this has changed noticeably. According to the Market Growth Report, the global construction software market size is expected to expand at a CAGR of 12,34% until 2028, reaching 3.489,54 million dollars by the end of this period.
Success secret to stand out in the market
The secret to success in B2B SaaS market it lies in the ability to build a growth machine that connects the product to the customer effectively. This means attracting potential consumers on a recurring basis, making them adopt and use the product, and thinking about strategies to increase the perceived value over time.
Quandt remembers that the concept of fly wheel of growth is fundamental at this point. This virtuous wheel revolves around three pillars:
- Customer attraction: bring potential customers into the company efficiently and with low acquisition costs;
- Product Adoption: make customers use the product effectively and realize the value it offers;
- Expansion of the customer base: sell more to existing customers (upsell) and offer new products and services (cross-sell).
For him, “the connection between the product and the market — that is, making it a wheel that always increases speed in relation to the number of customers, the average ticket and the lifetime value — is what in practice will dictate the success or failure of the business in the long term”.
That said, it is essential to pay attention to some key factors:
Identify the ideal customer profile
understand the ideal customer profile It is essential, and this is not a static process. This analysis evolves as the company grows and the product develops. It is necessary to adapt to market feedback and needs to maintain a connection with the market and ensure a relevant offer.
Have a defined focus and strategy
As mentioned in the challenges, having a clear strategy and a well-defined focus is crucial to condition the company's efforts in the right direction. This implies understanding the market, defining clear objectives and aligning all activities to the company vision and values.
Choose the right people
The success of a company also depends on the people who make it up. It is essential to recruit and maintain a talented team, committed and aligned with the business objectives.
Create one organizational culture that values the personal and professional development of employees is essential to drive growth and innovation.
Analyze the market
Analyze the market It is essential to understand the size of the opportunity and validate the demand for the product. This means understanding the pain the company solves, the size of the addressable market and the existing competition. This study allows you to identify growth opportunities and adjust your strategy assertively.
O B2B SaaS market Brazil is experiencing great growth and offers diverse opportunities for companies of all sizes. The advantages of the model make it attractive to those looking to increase efficiency and competitiveness.
By overcoming the challenges mentioned in this article and taking advantage of market trends, companies built using this model can achieve significant and sustainable growth over the years.
And since the subject is sustainable growth, it's worth continuing here on Portal Visão Softplan and learn about the main metrics for SaaS!
