You are on page 1of 23

SaaS Wars: Europe Awakens

Europe & Israel 100 most promising SaaS companies

1
Subtitle

2
Global footprint

Source: Accel 3
We love SaaS

2000 Today

Source: Accel 4
My Background

$11B(1)

Source: Accel 5
SaaS is eating Software
Reflecting a shift from legacy IT services to cloud-based services

Peak in
Global Software and SaaS revenues ($B) 2014

358
348 351
338 335
325
315 -$10B
290 296
280
271 275
255
245
230
$11B
199
210
(1)

180

106
87 +$19B
72
56
41 43
12 19
2 2 4 7 8 10
0 1 1 1

Salesforce 1999 2001 2003 2005 2007 2009 2011 2013 2015
launch

Source: Gartner, Statista, Forrester Research, AMR 6


Faster adoption curve

Years to reach $5 Billion in revenue

26

19 20
$11B
15(1)

Salesforce Oracle SAP

Source: Gartner, Statista, Forrester Research 7


Even though multiples went down…
SaaS EV / Forward 12-Month Revenue Multiples Since 2005
10.0x
2011 Average 2012 Average 2013 Average 2014 Average 2015 Average High Jan 17, 2014

4.9x 5.5x 7.3x 6.9x 5.6x 9.4x


8.0x

6.0x
Average Since Jan 2005

4.9x
4.0x

2.0x

0.0x
05

05

08

08

09

09

10

11

14

14

15

15

16

16
c0

v0

r0

t0

l1

c1

c1

v1

r1

t1
n

ay

ar

ay

ar

n
Ju
Ap

Ap
Oc

Oc
De

De

De
No

No
Au

Au
Se

Fe

Se

Fe
Ja

Ju

Ja

Ju

Ja

Ju
M

M
M

M
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

Source: Pacific Rest Securities | Capital IQ; depicts average EV / NTM revenue consensus estimate valuations of the SaaS universe on a weekly basis (Based on price at end of week) 8
…SaaS market is more resilient than other tech segments
120

110

100

90

80

70

60

50
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

SaaS (Vertical) NASDAQ SaaS (Horizontal) IT Infrastructure IT Security Big Data

6% 3% 2% 16% 19% 34%


Note: IT Security Index: AVG, SYMC, CHKP, FTNT, PANW, FIRE, IMPV, VDSI, PFPT, FEYE, QLYS SaaS Horizontal Index: CRM, N, ULTI, JCOM, TRAK, APPF, BCOV, DWRE, LOGM, CTCT, CSOD, LPSN, MKTG, VOCS, IL, TNGO, SPSC, SQI, ZIXI, NOW,
WDAY, LOC, FLTX, QLYS, MKTO, MRIN, NEWR, CARB, TNET, CALD, BOX, PCTY, BV, ZEN, RNG, CVT, FIVN, ECOM, AMBR, SAAS, UP, XTLY SaaS Vertical Index: ATHN, MODN, VEEV, GWRE, RP, FLTX, ELLI, MDSO Big Data Index: EMC, TDC, INFA,
MSTR, SPLK, DWCH, ATTUF, NTAP, DATA, FIO, FALC IT Infrastructure Index: VMW, CTXS, NTAP, CA, RHT, SWI, OTEX, CVLT, CPWR, QLIK, PEGA, MVSN, PRGS, JIVE, NTCT, BLOX, GUID, MGIC, FALC, FIO, GIMO, SSNI, CYNI

Source: Centaur Partners, Capital IQ 9


Europe has traditionally lagged behind the US in IPO…
Company IPO Year Market Cap

Number of SaaS IPOs 2010 $2.9 B

58
2013 $1.7 B

$11B(1)
2014 $3.0 B

Add logos 2015 $1.0 B

4 $8.6 B

Combined Market Cap: $137 B


US Europe & Israel

Source: Gartner, Statista, Forrester Research 10


… and in VC funding
Total SaaS VC funding 2015 Top SaaS companies in terms of VC funding

$1107M
$631M

$7B $583M
$559M
$540M
$522M

$117M
$116M
$111M
$110M
$0.9B
$91M
$87M
$84M
$75M
$60M

Source: CB Insight, PitchBook, Crunchbase 11


Europe Awakens

12
The number of SaaS companies created is exploding…

Number of SaaS companies created in Europe


701
x4

179

2007-2009 2013-2015

Source: Mattermark 13
… as well as SaaS funding
Funding for SaaS companies created in Europe
Base 100
220
x2

100

2007-2009 2013-2015

Source: Crunchbase 14
The next generation

• Market attractiveness
1,000+ SaaS Companies
• Differentiation
• Team
12+ countries
• Momentum (MRR, employees)

Source: Accel 15
$2.5B in Total
28 companies Funding
raised $30M +
Accel Euroscape 2016
$0.8B in 2015

Marketing/Content Management Sales/Lead Gen/Support Finance Human Resources Vertical

Retail
Finance
Health
Productivity /
Collaboration

Data /
Analytics

Other
Developers /
Infrastructure

16
UK, France and Israel are the top 3 represented countries

Number of SaaS
X companies in Accel
4 Top 100
4
• UK, France and Israel
are the top 3
3
represented country in
3 4
our ranking with 20
20
companies each, far 2
far ahead of Germany 3 7
which has 8
companies 19
• The rest of Europe is
very fragmented 4
18

(1) Only including countries with > 1 SaaS company in the ranking 17
Marketing is dominating, Vertical SaaS is emerging
Split by category Europe vs. US
%
Marketing/Content mgmt 22
13
Sales/Lead Gen/Support 16
12
4
• Marketing is the leading
Finance
7 SaaS industry in Europe,
HR 12 followed by Sales/Lead Gen
10 Support and Developers/
Vertical 17 Infrastructure
23
Productivity/Collaboration
5 • Europe is underrepresented
9 in vertical SaaS solutions
`Data/Analytics
10
8
Developers/Infrastructure 14
18

Accel Euroscape US Top 300 SaaS companies

18
Average funding in Europe is 30-40% lower than in the US

Average ARR 3 4 8 26
($M)
113
+36%

72
Average total
funding ($M)
+43% 37
+43%
19 21
+60% 11
2 5

Seed Series A Series B Late Stage

Accel Euroscape Top 300 US companies

Source: Accel, Crunchbase, Mattermark 19


Building European champions

B2B Global Platforms B2C Local Champions


“US Champion” “Local Winner takes all”

Success Criteria: US footprint Success Criteria: 10x dominance in a specific


geography

Examples: Examples:

20
Cristal balling
• AI & ML technologies coming to age (data, algorithms, computer power)
AI & Machine
• Potential to reinvent existing workflow and make them smart
learning
• Examples: Shift Technology, Slack BOTs

• APIs are now ubiquitous


API & Infrastructure • Global competition pushed developers to build faster and concentrate on core product
• Examples: Algolia, Intercom

• Vertical Apps have a slower refresh cycle but legacy are getting old
Vertical Apps • Few winners yet, mobile and AI opening new perspectives
• Examples: Doctolib, Metapack

21
Contact: saas@accel.com
22
Disclaimer
This document has been prepared by Accel Partners Management LLP (hereinafter Accel). Accel is a limited liability partnership incorporated in
England and Wales with registered number OC303424, having its registered office at 1 New Burlington Place, London, SW1. Accel is authorised
and regulated by the Financial Services Authority (the "FSA") and is entered on the FSA register with registration number 222503.
This document is provided for information purposes only and does not constitute an offer or a recommendation to purchase or sell any security
or service. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful.
This document forms part of a presentation to persons who have been invited to attend such presentation and must be read and considered in
the context of that presentation only.
This document does not contain personalized recommendations or advice and is not intended to substitute any professional advice on
investment in financial products. Before entering into any transaction, an investor should consider carefully the suitability of a transaction to
his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal,
regulatory, credit, tax, and accounting consequences.
This document is the property of Accel and is addressed to its recipient exclusively for their personal use. It may not be reproduced (in whole or
in part), transmitted, modified, or used for any other purpose without the prior written permission of Accel.

23

You might also like