Post on 18-Jan-2017
transcript
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SaaS Wars: Europe Awakens Europe & Israel 100 most promising SaaS companies
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Subtitle
3Source: Accel
Global footprint
Source: Accel 4
We love SaaS
2000 Today
5
My Background
$11B(1)
Source: Accel
Source: Gartner, Statista, Forrester Research, AMR 6
SaaS is eating SoftwareReflecting a shift from legacy IT services to cloud-based services
$11B(1)
Global Software and SaaS revenues ($B)
Salesforce launch
Peak in 2014
1999 2001 2003 2005 2007 2009 2011 2013 2015
325335358351348338
315296290280275271
255245230
210199
180
10687
7256
4341191210874221110
-$10B
+$19B
Source: Gartner, Statista, Forrester Research 7
Faster adoption curve
$11B(1)
Years to reach $5 Billion in revenue
Salesforce Oracle SAP
26
201915
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
Jan 05Jun 05
Dec 05
May 06
Nov 06Apr 0
7Oct
07
Mar 08
Sep 08Feb 09
Aug 09Jan 10
Jul 10
Dec 10
Jun 11Dec 1
1
May 12
Nov 12Apr 1
3Oct
13
Mar 14
Sep 14Feb 15
Aug 15Jan 16
Jun 16
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
Even though multiples went down…SaaS EV / Forward 12-Month Revenue Multiples Since 2005
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
2011 Average
4.9x2012 Average
5.5x2013 Average
7.3x2014 Average
6.9x2015 Average
5.6x
Average Since Jan 2005
4.9x
High Jan 17, 2014
9.4x
50
60
70
80
90
100
110
120
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Source: Centaur Partners, Capital IQ 9
…SaaS market is more resilient than other tech segments
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
SaaS (Vertical)
6%NASDAQ
3%SaaS (Horizontal)
2%IT Infrastructure
16%IT Security
19%Big Data
34%
Source: Gartner, Statista, Forrester Research 10
Europe has traditionally lagged behind the US in IPO…
$11B(1)
Number of SaaS IPOs
Add logos
US Europe & Israel
4
58
Combined Market Cap: $137 B
Company IPO Year Market Cap
2010 $2.9 B
2013 $1.7 B
2014 $3.0 B
2015 $1.0 B
$8.6 B
Source: CB Insight, PitchBook, Crunchbase 11
… and in VC fundingTotal SaaS VC funding 2015 Top SaaS companies in terms of VC funding
$522M
$540M
$559M
$583M
$631M
$1107M
$60M
$75M$84M
$87M$91M
$110M
$111M$116M
$117M
$7B
$0.9B
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Europe Awakens
Source: Mattermark 13
The number of SaaS companies created is exploding…
Number of SaaS companies created in Europe
x4
2007-2009 2013-2015
701
179
Source: Crunchbase 14
… as well as SaaS funding
Funding for SaaS companies created in Europe Base 100
x2
2007-2009 2013-2015
220
100
Source: Accel 15
The next generation
1,000+ SaaS Companies
12+ countries
• Market attractiveness • Differentiation • Team • Momentum (MRR, employees)
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Accel Euroscape 2016Marketing/Content Management Sales/Lead Gen/Support Finance
Productivity / Collaboration
Developers /Infrastructure
Human Resources Vertical
Data / Analytics
Reta
ilFi
nanc
eHe
alth
Othe
r
28 companies raised $30M +
$2.5B in Total Funding $0.8B in 2015
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UK, France and Israel are the top 3 represented countries
(1) Only including countries with > 1 SaaS company in the ranking
• UK, France and Israel are the top 3 represented country in our ranking with 20 companies each, far far ahead of Germany which has 8 companies
• The rest of Europe is very fragmented
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20
19
3
4
X
4
732
Number of SaaS companies in Accel Top 100
3
18
18
Marketing is dominating, Vertical SaaS is emergingSplit by category Europe vs. US %
Marketing/Content mgmt
Sales/Lead Gen/Support
Finance
HR
Vertical
Productivity/Collaboration
`Data/Analytics
Developers/Infrastructure 18
8
9
23
10
7
12
13
14
10
5
17
12
4
16
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Accel Euroscape US Top 300 SaaS companies
Marketing is dominating, Vertical SaaS is emerging
• Marketing is the leading SaaS industry in Europe, followed by Sales/Lead Gen Support and Developers/Infrastructure
• Europe is underrepresented in vertical SaaS solutions
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Average funding in Europe is 30-40% lower than in the US
Source: Accel, Crunchbase, Mattermark
Average total funding ($M)
Average ARR ($M)
Seed Series A Series B Late Stage
113
3719
5
72
2111
2
Accel Euroscape Top 300 US companies
3 4 8 26
+43%+43%
+36%
+60%
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Building European champions
B2B Global Platforms B2C Local Champions
Success Criteria:
Examples:
10x dominance in a specific geography
“Local Winner takes all”
Success Criteria:
Examples:
US footprint
“US Champion”
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Cristal balling• AI & ML technologies coming to age (data, algorithms, computer power) • Potential to reinvent existing workflow and make them smart • Examples: Shift Technology, Slack BOTs
AI & Machine learning
API & Infrastructure
Vertical Apps
• APIs are now ubiquitous • Global competition pushed developers to build faster and concentrate on core product differentiation • Examples: Algolia, Intercom
• Vertical Apps have a slower refresh cycle but legacy are getting old • Few winners yet, mobile and AI opening new perspectives • Examples: Doctolib, Metapack
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Contact: saas@accel.com
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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.