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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
320325
335
358351348
338
315
296290
280275271
255
245
230
210
199
180
125
106
87
72
56
4341
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 funding
Total 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
$90M
2015 2016 2017E
4
4.394.95
7
2015 2016 2017E
1
1.620.9
2015 2016 2017E
0.4
0.480.160.4
2008-2010 2014-2016
670
200
10
EU SaaS factory is cranking…
Source: Accel, Crunchbase
# of SaaS companies created in Europe
x3.3
Funding for SaaS companies created in Europe
Base 100
2008-2010 2014-2016
180
100
x1.8
11
… and we follow suit
Source: Accel, Capital IQ
Accel investment in SaaS companies
USD, Millions
0%
25%
50%
75%
100%
2010 2011 2012 2013 2014 2015 2016 2017 YTD
42%
20%
11%11%3%3%4%
Europe Global
216 168 418 177 460 477 187 405
12
EU/US funding gap still exists
Source: Accel, Crunchbase, Mattermark
Average total
funding ($M)
Average ARR
($M)
Seed Series A Series B Late Stage
113
37
19
5
81
28
14
1.3
72
21
11
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
(AnnualRecurringRevenue(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 19.0
18.0
14.0
7.27.0
6.0
USD, Millions
16
Headcount growth driven by business model
Source: Accel
AnnualRecurringRevenue(ARR)
0
2,500,000
5,000,000
7,500,000
10,000,000
Headcount
0 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 2017
Marketing/Content Management Sales/Lead Gen/Support
Productivity /
Collaboration
Developers /

Infrastructure/
Automation
Finance/Human Resources Vertical
Data /
Analytics
RetailFinanceOther
Security
19Source: Accel
20Source: Crunchbase
Euroscape 2017 demographics
15%
22%
21%
42%
0-5M
5-10M
10-30M
30M+
Revenue run-rate
23%
35%
25%
17% 0-5M
5-15M
15-50M
50M+
Capital raised to date
# companies by country 2016-17 capital raised by country
917
134
403 1,162
764 UK
Israel
France
Germany
Other
35
8
18
20
19 UK
Israel
France
Germany
Other (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
24
25
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, W1. Accel is authorised and regulated by the Financial Conduct Authority (the "FCA") and is entered
on the FCA 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.
Disclaimer

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Accel Cloud Europe 2017: The factory is Cranking

  • 1. Cloud Europe Top 100 2017 The Factory is Cranking September 18th, 2017
  • 2. Source: Accel 135 SaaS investments today and counting … We Love SaaS Globally 2
  • 3. 3 $2.5 Billion Invested in Cloud Companies Source: Accel Global Accel Investments in SaaS companies USD, Millions 0 300 600 900 1,200 2000-02 2003-05 2006-08 2009-11 2012-14 2015-17E 1056 55 103 409 1070 47
  • 4. 4 • Market Update • The Top 100 • “Crystal balling”
  • 5. 5Source: Gartner, Statista, Forrester Research, AMR SaaS continues to eat Software Global Software and SaaS revenues ($B) Salesforce launch Peak in 2014 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 320325 335 358351348 338 315 296290 280275271 255 245 230 210 199 180 125 106 87 72 56 4341 191210874221110 -$5B +$19B
  • 6. 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
  • 7. 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. 8 IPO window is open : 12 IPOs in 2015-17 Source: Accel
  • 9. 9Source: CB Insight, PitchBook, Crunchbase Healthy private funding Total 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 $90M 2015 2016 2017E 4 4.394.95 7 2015 2016 2017E 1 1.620.9 2015 2016 2017E 0.4 0.480.160.4
  • 10. 2008-2010 2014-2016 670 200 10 EU SaaS factory is cranking… Source: Accel, Crunchbase # of SaaS companies created in Europe x3.3 Funding for SaaS companies created in Europe Base 100 2008-2010 2014-2016 180 100 x1.8
  • 11. 11 … and we follow suit Source: Accel, Capital IQ Accel investment in SaaS companies USD, Millions 0% 25% 50% 75% 100% 2010 2011 2012 2013 2014 2015 2016 2017 YTD 42% 20% 11%11%3%3%4% Europe Global 216 168 418 177 460 477 187 405
  • 12. 12 EU/US funding gap still exists Source: Accel, Crunchbase, Mattermark Average total funding ($M) Average ARR ($M) Seed Series A Series B Late Stage 113 37 19 5 81 28 14 1.3 72 21 11 2 Accel Euroscape 2016 Accel Euroscape 2017 Top 300 US companies 3 4 8 26
  • 13. 13 EU companies compare well on growth rates… Source: Accel Time to grow from $1m to $10m ARR (AnnualRecurringRevenue(ARR) US Company EU Company
  • 14. 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. 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 19.0 18.0 14.0 7.27.0 6.0 USD, Millions
  • 16. 16 Headcount growth driven by business model Source: Accel AnnualRecurringRevenue(ARR) 0 2,500,000 5,000,000 7,500,000 10,000,000 Headcount 0 25 50 75 100 125 150 175 200 225 250 Sales-drivenProduct centric
  • 17. 17 • Market Update • The Top 100 • “Crystal balling”
  • 18. 18Source: Accel The next generation 1,000+ SaaS Companies 12+ countries • Market attractiveness • Differentiation • Technology • Team strength • Momentum (MRR, employees)
  • 19. 19 Accel Euroscape 2017 Marketing/Content Management Sales/Lead Gen/Support Productivity / Collaboration Developers /
 Infrastructure/ Automation Finance/Human Resources Vertical Data / Analytics RetailFinanceOther Security 19Source: Accel
  • 20. 20Source: Crunchbase Euroscape 2017 demographics 15% 22% 21% 42% 0-5M 5-10M 10-30M 30M+ Revenue run-rate 23% 35% 25% 17% 0-5M 5-15M 15-50M 50M+ Capital raised to date # companies by country 2016-17 capital raised by country 917 134 403 1,162 764 UK Israel France Germany Other 35 8 18 20 19 UK Israel France Germany Other (16 countries)
  • 21. 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. 22 • Market Update • The Top 100 • “Crystal Balling”
  • 23. 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
  • 25. 25 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, W1. Accel is authorised and regulated by the Financial Conduct Authority (the "FCA") and is entered on the FCA 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. Disclaimer