1) SaaS adoption is growing rapidly globally, with the European market starting to catch up to the United States in terms of the number of SaaS companies and funding. 2) Marketing and sales SaaS solutions dominate the European market currently, while vertical industry applications are emerging. 3) On average, SaaS companies in Europe receive 30-40% less total funding than similar US companies, though the funding gap is decreasing.

1. 1
SaaS Wars: Europe Awakens
Europe & Israel 100 most promising SaaS companies

2. 2
Subtitle

3. 3Source: Accel
Global footprint

4. Source: Accel 4
We love SaaS
2000 Today

5. 5
My Background
$11B(1)
Source: Accel

6. Source: Gartner, Statista, Forrester Research, AMR 6
SaaS is eating Software
Reflecting 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
325
335
358351348
338
315
296290
280275271
255
245
230
210
199
180
106
87
72
56
4341
191210874221110
-$10B
+$19B

7. Source: Gartner, Statista, Forrester Research 7
Faster adoption curve
$11B(1)
Years to reach $5 Billion in revenue
Salesforce Oracle SAP
26
2019
15

8. 0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
Jan
05
Jun
05
Dec05
M
ay06
Nov06
Apr07
Oct07
M
ar08
Sep
08
Feb
09
Aug
09
Jan
10
Jul10
Dec10
Jun
11
Dec11
M
ay12
Nov12
Apr13
Oct13
M
ar14
Sep
14
Feb
15
Aug
15
Jan
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
4.9x
2012 Average
5.5x
2013 Average
7.3x
2014 Average
6.9x
2015 Average
5.6x
Average Since Jan 2005
4.9x
High Jan 17, 2014
9.4x

9. 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%

10. 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

11. Source: CB Insight, PitchBook, Crunchbase 11
… and in VC funding
Total 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

12. 12
Europe Awakens

13. 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

14. Source: Crunchbase 14
… as well as SaaS funding
Funding for SaaS companies created in Europe
Base 100
x2
2007-2009 2013-2015
220
100

15. Source: Accel 15
The next generation
1,000+ SaaS Companies
12+ countries
• Market attractiveness
• Differentiation
• Team
• Momentum (MRR, employees)

16. 16
Accel Euroscape 2016
Marketing/Content Management Sales/Lead Gen/Support Finance
Productivity /
Collaboration
Developers /
Infrastructure
Human Resources Vertical
Data /
Analytics
RetailFinanceHealthOther
28 companies
raised $30M +
$2.5B in Total
Funding
$0.8B in 2015

17. 17
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
4
4
20
19
3
4
X
4
73
2
Number of SaaS
companies in Accel
Top 100
3
18

18. 18
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
18
8
9
23
10
7
12
13
14
10
5
17
12
4
16
22
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

19. 19
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
37
19
5
72
21
11
2
Accel Euroscape Top 300 US companies
3 4 8 26
+43%
+43%
+36%
+60%

20. 20
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”

21. 21
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
• 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

22. 22
Contact: saas@accel.com

23. 23
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