accel cloud europe 2017: the factory is cranking
TRANSCRIPT
Cloud Europe Top 100 2017
The Factory is Cranking
September 18th, 2017
Source: Accel
135 SaaS investments today and counting …
We Love SaaS Globally
2
3
$2.5 Billion Invested in Cloud Companies
Source: Accel
Global Accel Investments in SaaS companies USD, Millions
0
300
600
900
1,200
2000-02 2003-05 2006-08 2009-11 2012-14 2015-17E
1056
55 103
409
1070
47
4
• Market Update
• The Top 100
• “Crystal balling”
5Source: Gartner, Statista, Forrester Research, AMR
SaaS continues to eat Software
Global Software and SaaS revenues ($B)
Salesforce launch
Peak in 2014
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
320325335358351348338
315296290280275271
255245230
210199180
125106
8772
564341
191210874221110
-$5B
+$19B
6
SMB is getting real
Source: Accel, Capital IQ
Key Public Companies Key M&A exits
1,140
2,740
2,630
2,760
10,100
850
1,100
9,300
Market Cap, USD Millions USD, Millions
7Source: BVP
Cloud Index grew 350% since 2011
Note: SaaS universe index is equally-weighted and includes the following (when each was publicly traded): ALRM, AMBR, APPF, ATHN, BCOV, BNFT, BOX, CSOD, CTCT, CVT, DMAN, DWRE, ECOM, EOPN, ET, FIVN, FLTX, HUBS, INST, KNXA, LOGM, MB, MIME, MKTG, MKTO, MRIN, N, NEWR, NOW, OMTR, PFWD, QTWO, RALY, RNG, RNOW, RP, SFSF, SHOP, SLRY, SPSC, SQI, TLEO, TRAK, TWOU, TXTR, VEEV, WDAY, WK, XTLY, YDLE and ZEN
index
8
IPO window is open : 12 IPOs in 2015-17
Source: Accel
9Source: CB Insight, PitchBook, Crunchbase
Healthy private fundingTotal SaaS VC funding Notable rounds 2016-17
$108M$131M
$158M$180M
$200M$600M
USD, Billions USD, Millions
$28M$35M$36M
$50M$50M
$53M
$8M$8M
$14M$55M
$60M$90M
2015 2016 2017E
44.394.95
7
2015 2016 2017E
11.620.9
2015 2016 2017E
0.40.480.160.4
2008-2010 2014-2016
670
200
10
EU SaaS factory is cranking…
Source: Accel, Crunchbase
# of SaaS companies created in Europe
x3.3
Funding for SaaS companies created in Europe Base 100
2008-2010 2014-2016
180
100
x1.8
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… and we follow suit
Source: Accel, Capital IQ
Accel investment in SaaS companies USD, Millions
0%
25%
50%
75%
100%
2010 2011 2012 2013 2014 2015 2016 2017 YTD
42%
20%11%11%3%3%4%
Europe Global
216 168 418 177 460 477 187 405
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EU/US funding gap still exists
Source: Accel, Crunchbase, Mattermark
Average total funding ($M)
Average ARR ($M)
Seed Series A Series B Late Stage
113
37
195
81
2814
1.3
72
2111
2
Accel Euroscape 2016 Accel Euroscape 2017 Top 300 US companies
3 4 8 26
13
EU companies compare well on growth rates…
Source: Accel
Time to grow from $1m to $10m ARR
(Ann
ual R
ecur
ring
Reve
nue
(ARR
)
US Company EU Company
14
…at different stages of growth…
Source: Accel, Crunchbase, Mattermark
Time to reach $1m ARR
T0 0.5year 1year 1.5 years 2 years 2.5 years
European Companies US Companies
15
… and appears to be more capital efficient
Source: Accel, Crunchbase, Mattermark
Cash burned to go from $0 to $10M ARR
0
5
10
15
20 19.018.0
14.0
7.27.06.0
USD, Millions
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Headcount growth driven by business model
Source: Accel
Annu
al R
ecur
ring
Reve
nue
(ARR
)
0
2,500,000
5,000,000
7,500,000
10,000,000
Headcount0 25 50 75 100 125 150 175 200 225 250
Sales-drivenProduct centric
17
• Market Update
• The Top 100
• “Crystal balling”
18Source: Accel
The next generation
1,000+ SaaS Companies
12+ countries
• Market attractiveness • Differentiation • Technology • Team strength • Momentum (MRR, employees)
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Accel Euroscape 2017Marketing/Content Management Sales/Lead Gen/Support
Productivity / Collaboration
Developers /Infrastructure/
Automation
Finance/Human Resources Vertical
Data / Analytics
Reta
ilFi
nanc
eOt
her
Security
19Source: Accel
20Source: Crunchbase
Euroscape 2017 demographics
15%
22%
21%
42%
0-5M5-10M10-30M30M+
Revenue run-rate
23%
35%
25%
17% 0-5M5-15M15-50M50M+
Capital raised to date
# companies by country 2016-17 capital raised by country
917
134403 1,162
764 UKIsraelFranceGermanyOther
35
818
20
19 UKIsraelFranceGermanyOther (16 countries)
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Marketing is dominating, Vertical SaaS is emerging
Split by category Europe vs. US %
Marketing/Content mgmt
Sales/Lead Gen/Support
Finance/HR
Vertical
Productivity/Collaboration
`Data/Analytics
Developers/Infrastructure
Security 8
17
7
8
21
16
11
12
13
12
11
3
16
16
12
17
Accel Euroscape 2017 US Top 300 SaaS companies
• Marketing, Data / Analytics and Security overweighted vs. the US
• Under-representation in vertical solutions, productivity and Developers Infrastructure
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• Market Update
• The Top 100
• “Crystal Balling”
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“Crystal balling” 2018• Clear ROI for enterprise: e.g., big impact in back office automation • Workflow being redesigned and optimised with smart technologies • SIs developing large practices (process redesign and implementation) and accelerating adoption • Examples: UI Path, Celonis, Digital Genius
AI & Automation
APIs and microservices
Vertical Apps
• Need for speed and agility: next generation infrastructure driven by APIs and microservices • Opportunity for “plug and play” infrastructure components and new management tools • Examples: Algolia, Intercom, Instana
• Lower refresh cycle but legacy solutions getting old • Few winners yet, mobile and AI opening new perspectives • Examples: Doctolib, Mambu, Shift Technology
Rise of SMB
Compliance & Security
• SMBs getting online and adopting SaaS globally: reached tipping point of the “S-curve” • Digital and field-driven Go To Market engines proved their efficiency • Market able to support $10 Billion+ market cap (e.g., Shopify, Netsuite) • Examples: Soldo, Payfit, Typeform
• Cyber threats on the rise: acute need for security and compliance platforms • Key challenge: security vs. usability for customer / internal processes. How can we get rid of passwords? • Perimeter paradigm disappearing with cloud and mobile devices, requiring new tools • Examples: Check Recipient, CallSign, Darktrace
Source: Accel
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