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The Rise of Cloud in Europe from Bessemer Venture Partners

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The Rise of Cloud in Europe from Bessemer Venture Partners

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As Bessemer officially launches its presence in London, Alex Ferrara and Dhruv Jain are releasing this report to reaffirm that Silicon Valley doesn’t have a monopoly on innovation and entrepreneurship is a borderless endeavor. In this report, they share the signals giving us confidence in Europe as a new technology leader, the macro trends driving the rise of the European cloud ecosystem, and the predictions we believe will be a driving force for our investments. To read the full report go to: https://www.bvp.com/atlas/the-rise-of-cloud-in-europe

As Bessemer officially launches its presence in London, Alex Ferrara and Dhruv Jain are releasing this report to reaffirm that Silicon Valley doesn’t have a monopoly on innovation and entrepreneurship is a borderless endeavor. In this report, they share the signals giving us confidence in Europe as a new technology leader, the macro trends driving the rise of the European cloud ecosystem, and the predictions we believe will be a driving force for our investments. To read the full report go to: https://www.bvp.com/atlas/the-rise-of-cloud-in-europe

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The Rise of Cloud in Europe from Bessemer Venture Partners

  1. 1. 10/28/20 • Confidential State of Cloud 2020 The Rise of Europe Dhruv Jain Investor @groovyydhruvy Alex Ferrara Partner @alexferrara
  2. 2. Sir Henry Bessemer Circa 1872 The OG European Founder
  3. 3. $8b+ 122+ 15 200+ ASSETS INITIAL PUBLIC OFFERINGS INVESTING PARTNERS ACTIVE PORTFOLIO COMPANIES SILICON VALLEY & SAN FRANCISCO NEW YORK BOSTON ISRAEL INDIA 1911 YEAR FOUNDED LONDON A Global VC Fund Made Possible by a European Inventor
  4. 4. New faces Tobias Lütke Karen Peacock Niklas Zennström Jean-Baptiste Rudelle
  5. 5. Innovation is now borderless 2000 2010 2020
  6. 6. COVID has accelerated a Virtual First World
  7. 7. Four reasons to be even more excited about the European tech scene
  8. 8. VC Investment in Europe is trending upwards 10.6 11.4 14.6 16.2 23.4 4.7 5.1 8.0 8.4 11.5 $0 $10 $20 $30 $40 Venture capital raised by region ($Bn) EU-27 UK Startups raised a record amount of VC in 2019 16.5 22.6 24.6 34.9 Source: European Startups Launch Report 2020 PitchBook-NVCA Venture Monitor Q2 2020 201820162015 2017 2019 15.3 $Bn
  9. 9. Europe is increasingly producing $1B+ outcomes Note: Founded in Europe. Latest transactions only e.g. Markit, TeamViewer, Trivago 2014 5 37 2011 2015 2016 2017 20182013 201920122010 IPO M&A
  10. 10. Europe’s pipeline of unicorns has never been stronger $5.0B+ $1.0-1.5B $1.5B-5.0B
  11. 11. More European Decacorns Elect to Keep HQ in Europe Source: PCLN 2016 Annual Report, Capital IQ; Markcap as of 18 Aug. 2020 HQ SWEDEN $47B market cap SWEDEN $72B market cap NETHERLANDS v $50B market cap NETHERLANDS v$10B market cap GERMANY
  12. 12. 10/28/20 • Confidential 94%We’re living in a cloud-first world
  13. 13. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Cloud is eating software Cloud will become majority of software market within 5 years Software Cloud Source: CapIQ; Bessemer Venture Partners analysis
  14. 14. 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Cloud is eating software Software Cloud Cloud will become majority of software market within 5 years Source: CapIQ; Bessemer Venture Partners analysis; Cloud CAGR – 20%, Software CAGR – 10%
  15. 15. $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Public cloud: $1.7 trillion+ Total cloud market cap 65% CAGR 35% CAGR $BMarketCap 45% CAGR25% CAGR Oct 2020 $1.7T $690B Feb 5th 2019 $Bn
  16. 16. Deeper dive: European Cloud
  17. 17. $0 $10 $20 $30 $40 $50 $60 2016 2018 2020 $6.7B total market cap $32.9B total market cap (4.9x) $91.2B total market cap (13.7x) Source: CapIQ Note: 2016 & 2018 data is for last trading day of year, 2020 data is as of 31 July 2020 Top 5 European founded public cloud companies Up 14x 2016-2020 $Bn
  18. 18. Strong pipeline of 23 private cloud unicorns… …including the first European cloud decacorn Source: CB Insights $1.0-1.5B $1.5-5.0B$1.5-5.0B$1.0-1.5B $5.0$5.0B+
  19. 19. 20 DEEP POOL OF TECHNICAL TALENT SEED FUND DEVELOPMENT NEXT GENERATION EUROPEAN FOUNDERS European Tech’s Virtuous Cycle
  20. 20. What are some predictions?
  21. 21. Prediction 1: Product led growth wins, regardless of location Driver: Europe’s SMB and Mid market are a beachhead into the global enterprise Support Live Chat Software E-commerce Payments Web Development CRM Marketing Collaboration
  22. 22. Prediction 2: Privacy debt is the new technical debt Jumbo DATA DE-IDENTIFICATION & ANONYMIZATION CONSUMER PRIVACY MANAGEMENT PRIVACY WORKFLOW & OPERATIONS DATA CATALOGUING DATA SCANNING & INVENTORY Driver: GDPR, Cybersecurity Act & Open Data Directive, Cloud Federation & Data Sovereignty
  23. 23. Prediction 3: We’re entering the age of “automation-at-scale” Source: European Commission’s Coordinated Plan on AI Driver: European Commission’s “digital first” agenda and priority on automating repeat tasks and workflows European Parliament Plenary 2019 INTEGRATED PLATFORM AS A SERVICE RPA AND ADJACENCIES SOFTWARE-DEFINED MANAGEMENT LOW CODE / NO CODE APP DEVELOPMENT
  24. 24. Prediction 4: Sustainable innovation goes mainstream RETAIL CORPORATE RESPONSBILITY DEEP TECH FOOD & AGRICULTURE Source: Who Cares, Who Does Study, Kantar Worldpanel Driver: Progressive European eco-consumers and governments demanding change
  25. 25. Prediction 5: Financial services become ubiquitous Driver: Open banking regulation drives new opportunities for financial services in Europe BANKING-AS-A-SERVICE & CARD ISSUANCE PAYROLL B2C & B2B LENDING IDENTITY / COMPLIANCE / FRAUD TREASURY/BILL PAY PAYDAY ADVANCE AGGREGATION INSURANCE / WARRANTY NEOBANK & BROKERAGE FACTORING / INVOICING
  26. 26. 10/28/20 • Confidential 2020 BESSEMER’S 5 PREDICTIONS FOR EUROPE Privacy debt will be the new technical debt We’re entering the age of “automation at scale” Sustainable innovation goes mainstream Financial services becomes ubiquitous 2 3 4 5 Product led growth wins, regardless of location1
  27. 27. The forecast calls for a high chance of cloud 28 68 MON Cloudy 64 TUE Cloudy 63 WED Cloudy 70 THUR Cloudy 71 FRI Cloudy
  28. 28. 10/28/20 • Confidential State of Cloud 2020 The Rise of Europe Dhruv Jain Investor @groovyydhruvy Alex Ferrara Partner @alexferrara
  29. 29. Thank You bvp.com/cloud @BessemerVP
  30. 30. Disclaimer The information contained herein regarding Bessemer Venture Partners and its affiliates (collectively “BVP”) is confidential and proprietary and intended only for use by the recipient. The materials may not be reproduced, distributed or used for any other purposes without the express prior written consent of BVP. The information contained herein is not complete, and does not contain certain material information about alternative investments, including important disclosures and risk factors associated with an investment in these types of vehicles, and is subject to change without notice. This document is not intended to be, nor should it be construed or used as, an offer to sell, or a solicitation of any offer to buy, limited partner interests in any funds managed by BVP. Neither the Securities and Exchange Commission nor any state securities administrator has approved or disapproved, passed on, or endorsed, the merits of these securities. Investments in venture capital and alternative investments entail substantial risk and should not be intended as a complete investment program. Opportunities for redemption and transferability of interests in alternative investments are restricted so investors may not have access to capital when it is needed. There is no secondary market for interests in many alternative investments and none is expected to develop. Opinions expressed are current opinions as of the date appearing in this material only and is subject to change. The information provided in these materials is illustrative and no assurance can be provided that any of the future events referenced herein (including projected or estimated returns or performance results) will occur on the terms contemplated herein or at all. Any statistical information contained herein has been supplied for information purposes only and is not intended to be and does not constitute investment advice or an opinion regarding appropriateness of an investment in any BVP fund. While the data contained herein has been prepared from information that BVP believes to be reliable, neither BVP nor any third party has independently audited or verified the accuracy of such data, BVP disclaims any and all liability relating to such information, and BVP makes no representation or warranty as to the accuracy or completeness of such data. Investment returns may vary materially from the stated objectives. As with any investment vehicle, past performance cannot assure any level of future results.

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