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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.