The State of SaaS in #IndyTech

by High Alpha

Key takeaways from the 2018 Powderkeg Indy Tech Census.

The 2018 Powderkeg Indy Tech Census provides an excellent, detailed look into Indianapolis as a true tech hub — providing insights and takeaways that paint an exciting picture. High Alpha was thrilled to be a partner in this project. We highly encourage you to download the full report, but thought we would share some key takeaways and stats from the census that specifically highlight the happenings around SaaS in Indy tech.

The Tech Census surveyed technology founders, professionals, investors, and community supporters in central Indiana. The survey was completed by 359 respondents, and covered a variety of topics including basic demographic information, company performance, capital, community, and qualitative feedback. Here is a brief snapshot of the respondents:

Indianapolis Is a Great Place to Start a Company

Since Indianapolis was listed on the Amazon HQ2 Top 20 list, the national visibility of Indianapolis’s tech ecosystem has skyrocketed, including articles like:

The truth is, though, and the Indy tech ecosystem has been exploding for quite some time. The number of software companies founded in Indianapolis doubled between 2006 to 2011 and again increased by 50% from 2011 to 2016. We all know about the acquisitions that have drawn national attention to the Indianapolis tech scene (Software Artistry, Aprimo, ExactTarget, Interactive Intelligence, Appirio, Angie’s List, and many more), but overall the growth can be attributed to 2 over-arching factors. Indianapolis is:


The concept of “Hoosier Hospitality” is alive and well in the Indy tech community. Top words associated with the strengths of Indy tech include: hard work, collaboration, integrity, cooperation, transparency, honesty, growth, loyalty, passion, support, humility, innovation.


The cost of operating a business in central Indianapolis just makes sense. Runways are longer —startups can operate and grow quicker without feeling the constraint of depleting cash flow as soon. Large organizations can operate more effectively and efficiently at scale. Running a 500-person company in California is on average 72% more expensive than Indy.

Not only is Indy great for operators, it’s also attractive for talented employees. Indianapolis is extremely affordable compared to other top tech cities. Median rents are 50% higher in Chicago than in Indy, and 250% higher in San Francisco. The overall standard of living far out performs that of its peer cities.

SaaS Companies Are on the Rise and MarTech Stands Out

While tech as a whole is rapidly growing in Indianapolis, SaaS companies, in particular, are booming. 81.75% of respondents work in B2B SaaS, 7.1% B2C SaaS, and 11.11% in other categories, highlighting that SaaS is a clear, leading industry in the city.

Of all SaaS companies, marketing and sales companies are leading the pack.

45% of census respondents expect marketing and sales tech companies to grow the fastest over the next 5 years. Our own Kristian Andersen described the specific growth in SaaS in Indianapolis over the last 5 years and the next 5 years in this way:

“At High Alpha, our entire model is predicated on the belief that Indianapolis is one of the best cities in the world to launch and scale enterprise cloud software companies. We continue to see an uptick in venture deal flow, new business starts, talent attraction and retention, and global firms opening (or moving) offices to Indy. We’re confident that, in the next 5 years, we will see even more growth and dynamism in the Indy tech ecosystem — largely fueled by breakout companies in the enterprise cloud space.” — Kristian Andersen, Partner, High Alpha

Approximately 20% of the 138 tech company respondents were marketing and sales SaaS companies. The majority of marketing and sales SaaS company respondents were startups, and over 70% of respondents raised capital. For comparison, only 46% of total respondents in all categories raised capital.

There Is Room to Grow

The booming growth of the Indy tech community is impressive, but as with anything, Indy tech has room to grow. Specifically to SaaS, access to capital and talent diversity standout as two areas to channel the energy for improvement.

Access to Capital

Census responses from technology founders in Indianapolis showed that a slight majority of entrepreneurs are bootstrapping their tech companies and approximately half struggled to raise capital in the state of Indiana.

Of the 359 survey respondents, twelve described their primary role as professional investors in the Central Indiana tech community. The small ratio of full-time investors to survey respondents may help support the theory that raising capital in Central Indiana is difficult for many entrepreneurs. While raising capital is harder, the majority of investors who took the census believe there will be more tech investment opportunities in Central Indiana in the next three years and plan to invest the same or more into local companies over this period. So despite the current struggle, growth looks promising.

The bigger growth potential for Indianapolis, though, will come a greater access to capital outside Indiana. We are already seeing more and more coastal VC firms and investors outside Indianapolis pour investment dollars into Indy-based companies as they look to diversify investments outside California. According to PitchBook’s 2018 Venture Capital Outlook, the deal count in California has already shrunk 16% over the last two years.

Talent Diversity

The majority of the Indy tech community continues to be overwhelmingly white males with 69.6% of respondents identifying as male and 88.65% of respondents not identifying as an ethnic minority. Diversity and inclusion is an issue, however, that many in the industry are already taking big measures to tackle.

Among respondents, diversity & equality was chosen as the top social issue respondents would like to see the Indy tech community impact the most over the next 5 years, followed very closely by quality education.

While the majority of respondents ranked the Indianapolis tech community a 4.4/10 for diversity, inclusivity was ranked 6.3/10, highlighting a general desire and push to have more voices at the table.

The takeaways above are just a few of the key points from the Powderkeg report. We highly encourage checking out the whole Powderkeg Indy Tech Census here and look forward to more future insight and stats as we dig deeper into the report!

Thanks to the Powderkeg team for all their hard work. The future of tech in Indianapolis is bright, and we are excited to be a part of the growth and excitement.

An important note from Powderkeg: While we used the word census in the branding of the survey and this report, it’s worth noting that this survey is just that — a survey, and does not include feedback from the entire population of participants in the #Indytech community. In our outreach, we enlisted the support of several community partners in order to more evenly represent Indianapolis. At the end of the day however, our census was an opt-in survey.