Recent SaaS trends & the Accel Euroscape of the 100 most promising companies in Europe and Israel

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

24. Thank you !
pbotteri@accel.com
@pbotteri
24

25. 25
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