SaaS due diligence checklist: Indian startups selling abroad

Indian SaaS companies sell to the world from a few cities. The diligence questions follow the money abroad: which entity signs, which bank account it lands in, and who owns the code.

A founder in Pune or Chennai might bill a customer in Ohio, through a Delaware company, paid into a US bank account, for a product built by engineers on an Indian payroll. That's normal. It also means your usual checks need a map first. You can't verify revenue until you know which company earned it. We'll use the six checks from our guide to evaluating early-stage startups and add what cross-border SaaS businesses need.

Why does cross-border SaaS diligence start with a map?

Diligence on an Indian SaaS startup that sells abroad starts with a diagram: every legal entity, who owns it, which customers it contracts with, which bank accounts it uses and where the code and trademarks sit. Until you've got that map, your revenue, tax and ownership checks can point at the wrong company. We've written the rest of this post around it.

Investors already weigh the model heavily. In a survey of 885 venture capitalists by Gompers, Gornall, Kaplan and Strebulaev, 95% of firms called the founding team an important factor and 83% said the same of the business model. Those were mostly American investors, across sectors, so treat the numbers as global context. The point for you is narrower. A business model that bills in dollars from an Indian base has moving parts the deck won't show. Ask the founder to draw them. Today.

Which entity signs, bills and gets paid?

For each large customer, you're looking for three things: the entity named on the contract, the entity that raises the invoice and the bank account that receives payment. When all three agree, your revenue checks are simple. When they don't? You'll need to know why, and whether the arrangement was set up properly under the Income Tax Act and the Foreign Exchange Management Act, 1999.

The flip question

Some Indian founders move the parent company abroad, usually to Delaware, sometimes to Singapore or London, so the Indian company becomes a subsidiary. People call it a flip. It's legal when it's done right. Before anything else, confirm which entity you're buying shares in. If it's the foreign parent, the Indian company is a cost centre that builds the product. If it's the Indian company, check whether foreign customers pay it directly or pay a sister company that keeps the margin. Either can work. You just can't price it until you know, and the founder's lawyer in Mumbai or Bengaluru should be able to tell you in one email.

Export proceeds

When the Indian company exports services, Indian foreign exchange law sets a clock on the money. The RBI, by a press release dated 14 November 2025, extended the period for realising and repatriating the full export value of goods and services from nine months to 15 months from the date of export, and a March 2026 RBI press release confirmed the relaxation continues. So ask for an ageing of foreign receivables. Anything sitting near that limit needs an explanation, and probably a call to the customer.

GST on exports

Exports of services can be zero-rated under GST, which usually means the company files a letter of undertaking on the GST portal and claims refunds of the tax it's paid on inputs. Ask for the undertaking, the refund claims and their status. A stack of unclaimed refunds is cash the company forgot to collect. You'd want to know that either way.

How do you test recurring revenue in SaaS?

Recurring revenue is revenue that renews without a new sale. For a SaaS business, split every rupee and dollar into subscription fees, one-time setup work and services, then check how much of last year's subscription revenue renewed this year. The renewal number tells you more than any growth chart.

Ask for revenue by customer and month from the billing system, not a summary slide. Group customers by the month they started. Then check what each group paid a year later. If older groups pay more, customers are expanding. If they pay less, someone's leaving, and you'll want to call two of the ones who left. Our method for verifying revenue and client contracts covers the invoice and bank trail; for cross-border deals, add the Foreign Inward Remittance Certificate or advice your Indian bank issues for each payment.

Watch concentration, too. It's the quiet risk. One large American customer can be a fifth of revenue at the seed stage. That's fine if the contract runs for years and auto-renews. It isn't if the customer can leave with a month's notice.

You can't verify revenue until you know which company earned it.

Who owns the code and the data?

The product is code, so what you're really buying is ownership of that code. Check that every founder, employee and contractor who wrote it signed an assignment to the right entity, and that any transfer between an Indian company and a foreign parent was papered and priced. Then check how the product handles customer data in each country it sells to.

Look for the intercompany agreement if there's a foreign parent. It should say who owns the code, what the Indian company is paid for building it and how that price was set. The Income Tax Department reads these agreements under the transfer pricing rules, and so should you. For data, ask for the data processing agreements large customers signed. Large buyers in Europe and California usually ask for them, because the General Data Protection Regulation and state privacy laws make them liable, and the Digital Personal Data Protection Act, 2023 now applies at home.

What should a SaaS diligence checklist include?

Send these before your first meeting. A founder who sells abroad and keeps clean books can answer most of them in a day. If it takes a month, you've learned something.

• An entity chart: every company, its owners and its bank accounts.
• The top ten customers, with the contracting entity, billing entity and receiving account for each.
• Revenue by customer and month, split into subscription, setup and services.
• An ageing of foreign receivables against the 15-month realisation limit.
• The GST letter of undertaking and refund claims.
• IP assignments, the intercompany agreement and customer data processing agreements.

Then put the numbers through our unit economics check, with sales costs counted in the currency they're paid in.

What should you do first on a SaaS deal?

Draw the map first. Every other check you'll run depends on it. And a founder who can draw it in ten minutes, on a napkin, usually runs a tidy company.

For a company that bills abroad, the cap table and legal checks have to follow every entity and every contract.

Questions

What is different about diligence on an Indian SaaS startup that sells abroad?

The money crosses borders. You check which entity signs and invoices foreign customers, whether export proceeds reach India within the time FEMA allows, how GST treats the exports, and whether the code and trademarks sit in the entity you are investing in.

How long does an Indian company have to bring export money home?

The RBI extended the period for realising and repatriating the full value of exported goods and services from nine months to 15 months from the date of export, by a press release dated 14 November 2025. A March 2026 press release said the relaxation continues.

What is a flip, and why does it matter for investors?

A flip moves the holding company abroad, often to the US, with the Indian company becoming a subsidiary. Investors need to know which entity they are buying shares in, where the IP sits, and what Indian tax and foreign exchange filings the move needed.

How do you check recurring revenue in a SaaS startup?

Ask for revenue by customer and month, split into subscription fees and one-time setup or services work. Then group customers by start month and track how much each group pays a year later. Revenue that renews is recurring; revenue that does not is a project.

Sources: Reserve Bank of India, Trade Relief Measures for Exporters (press release), 31 Mar 2026 · Gompers, Gornall, Kaplan and Strebulaev, How Do Venture Capitalists Make Decisions?, NBER Working Paper 22587, 2016

For more on how startup funding works in India, read the MyStartupValley blog or visit mystartupvalley.com.