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

11

… 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

12

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

16

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)

19

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)

21

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

22

• Market Update

• The Top 100

• “Crystal Balling”

23

“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

Thank you !

pbotteri@accel.com @pbotteri

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