Indian VC Skepticism Toward Open Source

This reveals that Appsmith was early to a business model that local investors had not yet learned to underwrite. The company was built around open source distribution, self hosting, and a developer buyer, while much of Indian SaaS capital had been trained on more familiar proprietary, sales led software. That mismatch mattered at seed, even though India already had a deep bench of engineers contributing to major open source projects.

• Appsmiths product choice made the funding story harder to explain in a market that knew SMB SaaS better than open source monetization. The product was free to adopt, aimed at engineers, and initially monetized later, which looks very different from a standard seat based SaaS pitch.
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• The core wedge was real, even if investors were slow to see it. Appsmith let developers self host an internal tool builder next to their databases, avoid exposing production systems to the public internet, and ship CRUD apps and ops dashboards much faster than building in React from scratch.
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• Hasura helped create the template. Once Hasura and then Appsmith showed that Indian founded open source companies could attract global users and global capital, the category became easier to finance. Appsmith had raised $10.5M by October 2021 and later $41M in June 2022 as that model gained legitimacy.
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The next phase is that Indian open source companies will look more global from day one, with engineering concentrated in India and go to market increasingly anchored in the US and Europe. As more founders repeat the pattern, the financing gap shifts from whether open source can be a business to which open source products can turn developer adoption into durable commercial revenue.