The Rise of SaaS in Europe

2019 Accel Euroscape
The rise of Europe
SaaStock, Dublin, October 2019

PROPRIETARY & CONFIDENTIAL - DO NOT COPY
SaaS continues to eat Software
!2
Market Cap Growth Market Cap Value created
$, bn as of Oct 7 20192009 - 2019 $, bn, 2009-2019
Introduction
18.0 x 130 123
7.7 x 134 117
4.7 x 1047 823
3.1 x 125 85
1.7 x 180 77
1.4 x 87 38
Source: Yahoo! Finance, Capital IQ

Prime time for Europe
!3
Leader in Robotic Process Automation
From $8m to $200m ARR in 24m
$7B valuation
Founded in Bucharest, Romania
Introduction
Source: Forbes

US Europe India
Series A
2005
Seed
2009
Series A
2011
Series A
2017
Seed
2009
Seed
2011
Our global platform
!4
At a glance

!5
At a glance
We love SaaS globally
$32B $8B$11B$14B$16B $8B $7B
225 companies
$3.8bn invested
Source: Yahoo! Finance, market cap as of 7/10/2019, Capital IQ

…and have been cranking hard in Europe & Israel
!6
2010-14: 11 European SaaS Investments 2015-19: 28 European SaaS Investments
At a glance
$206m invested by Accel
$437m raised by the companies
5 Unicorns
$743m invested by Accel
$2.3b raised by the companies
3.6x
Accel Invested
Capital
5.3x
Capital raised
Not public Not public
Not public
Source: Accel analysis, Pitchbook

1
2
3
Market Snapshot
What’s Next?
Agenda
!7

Bigger, Stronger, Faster
!8
Bigger
Market Snapshot
FasterStronger
Market Cap of Public SaaS Companies
USD, Billion
SaaS Companies above $5B Market Cap
USD, Billion
Years to reach $100m ARR by founding date
0
5
10
15
20
25
1995 2000 2005 2010 2015
Yearstoreach$100mARR
Company Founding Date
16%36%
Companies 21 66
2009 2019
796
22
33
2009 2019
1
33x
36x
Source: The Angel VC Blog, BVP SaaS benchmarking Oct. 2009, CapitalQ, Yahoo! Finance, Market cap as of Oct 2009 and Oct 7, 2019

SaaS is becoming the new system of record
!9
Market Snapshot
Source: BetterCloud
Legacy Technology SaaS Application
Internal
Communication
Employee
Customer
Identity
Finance
Email
Code
Source: Better Cloud

IPO market is booming
!10
Market Snapshot
2015-2017 SaaS IPOs - 17 companies 2018-2019 SaaS IPOs: 24 companies
Market Cap at IPO +1 day
Reaching $10B
within a year of IPO
$29B
0
$126B
6
Source: Capital IQ, Yahoo! Finance

Strong valuation
!11
Public SaaS index Outpacing Nasdaq EV/rev. multiple way above historical average
Market Snapshot
14%
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
550%
600%
16/08/2013 16/08/2014 16/08/2015 16/08/2016 16/08/2017 16/08/2018
BVP Nasdaq Emerging Cloud Index Nasdaq Index S&P Index Dow Jones
Cloud: 430%+ growth
Nasdaq: 116%+ growth
Source: Bessemer Venture Partners Source: JMP Securities
Major Public Index 2013-2019 SaaS EV/Rev. multiples 2011-2019
6.0
6.4
6.0
7.1
6.7
7.3
7.8
6.6 6.5
6.2
6.5 6.5
4.7
5.0 5.0
4.8
5.5 5.5
5.0 5.0 5.0
6.2
5.2
5.8
6.1
6.5
7.0
7.4
7.8
8.6
8.1
8.4
8.8
9.4 9.4
9.9
10.7
12.2
12.3
7.3
7.9
9.0
8.5 8.5
9.2
9.0
9.9
8.1
7.8
8.0
7.5
7.0
7.5
8.4 8.4
7.9
7.1
7.0 7.0
7.1
6.0
5.7
4.6 4.6
5.5
5.6
6.1
6.9 6.9 6.9 7.0
6.3
5.4
5.8
5.5 5.5
5.7
7.7 7.7
7.6
8.1
7.8
7.6 7.5
6.6
7.6
7.8
7.9
8.5
9.6
8.8
9.9
10.5
8.2
8.8
7.7 7.8
9.6 9.7
10.9
10.5
11.611.7
10.4
9.8
10.0
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Median: 7.5x
Max: 12.3x
March 2014
Min: 4.6x
March 2016

Europe momentum continues to accelerate
Market Snapshot
EU SaaS IPOs EU Private SaaS UnicornEU SaaS M&A >$300m
USD, Billion, as of 7/10/2019 USD, Million
7 Public Companies 10 M&A 16 Unicorns
8.3
6.6
6.3
4.9
2.4
1.8
1.0
2400
1500
800
600
560
500
350
350
300
1000
!12Source: TechCrunch, Crunchbase, Pitchbook, Capital IQ

Europe now1/4 of the US and counting…
Market Snapshot
Total SaaS VC funding Notable rounds 2018-19
$295M
$300M
$300M
$300M
$392M
$450M
USD, Billions USD, Millions
$165M
$169M
$268M
$360M
$500M
$568M
15
2015 2019 YTD
20
2
2015 2019 YTD
5
+33%
+2.5x
!13Source: Crunchbase, TechCrunch, Pitchbook

Companies continue to compare well on growth rate
Market Snapshot
Years to grow from $1m to $10m ARR Years to grow from $10m to $50m ARR
(AnnualRecurringRevenue(ARR)
US EU
<12
<12
18
30
30
30
Time from $10m to $50m (in Months)
US EU
!14
24
Source: Company data, S1 filings, CapitalIQ, Accel analysis, Bessemer Venture Partners

EU capital efficiency still higher
Market Snapshot
Cash burn from 0 to $10m ARR Cash burn from $10m to $50m ARR
Cash burn from $0 to $10m ($m)
USD, Millions
6
20
18
16
14
12
8
6
4
2
10
7 7
12
14
17
18
19
Cash burn from $10m to $50m ($m)
0
60
40
20
0
9
34
40
58
44
0
USD, Millions
!15Source: Accel analysis

1
2
3
Market Snapshot
What’s Next?
Agenda
!16

2019 Accel Euroscape approach
!17
2019 Euroscape
1,000+ SaaS Companies
12+ countries
• Market attractiveness
• Differentiation
• Technology
• Team strength
• Momentum (MRR, employees)
•Customer Reviews from G2

2016-17 Euroscape track record
!18
2019 Euroscape
Financing UnicornExits
$9.6B raised
29 companies raised more than $100m
$4B realised
17 M&A
11 new Unicorns
$19B+ value created
Largest Raises, USD, Million Largest Exits, USD, Million Unicorn last known valuations, USD, Billion
202
204
217
218
228
229
234
255
297
977
200
220
220
300
350
350
560
800
1.0
1.0
1.0
1.0
1.0
1.2
1.2
1.3
1.6
1.9
7.0
Source: TechCrunch, Crunchbase, Pitchbook, Reuters
+

2019 Euroscape: Champions League
!19
2019 Euroscape
Value Created
$19.5B+
Financing
$3.1B
Employee Growth LTM
60% +
Average ARR
$120M+
$50m ARR++, TTM Growth >70%
Source: TechCrunch, Crunchbase

!20PROPRIETARY & CONFIDENTIAL - DO NOT COPY
Marketing Sales/Lead Gen/Support
Productivity /
Collaboration
Developers / 
Infrastructure/
Automation
Finance/Human Resources VerticalSales/Lead Gen/Support
FinanceOther
Data /
Analytics
Security
Top 100 EU & Israel SaaS companies with revenues between $1m and $50m+ ARR
Source: Accel analysis & survey

Euroscape 2019
200%
150%
100%
0
G2 Weighted Avg. Review Growth
(over the past 12 months)
46%
191%
EU <1k employees Euroscape 2019
80
60
40
20
0
Median G2 Score
47
71
2019 Winners loved by their customers
!21
2019 Euroscape
Score Reviews
Source: G2, companies with more than 10 reviews a year ago
50%
EU <1k employees

Euroscape 2019 demographics
!22
2019 Euroscape
8%
45%
22%
26% 1-5M
5-10M
10-30M
30-50M
Revenue run-rate
15%
42% 11%
32%
>50M
0-5M
15-50M
5-15M
Capital raised to date
# companies by country Capital raised by country
1,029
762
1,186
509
945 UK
Israel
France
Germany
Other
28
17
21
10
24
UK
Israel
France
Germany
Other (16 countries)
Source: TechCrunch, Crunchbase, Company data, Pitchbook, Datafox

UK
2017 2019
19
FR 18
GE 8
IL 20
Other 35
24
21
17
10
28
$0-5M
$5-15M
$15-50M
$50M + 23
35
25
17
32
42
15
11
2017 2019
Euroscape evolution
!23
2019 Euroscape
Revenue num - rate Geographic distributionCapital raised
100
$0-5M
$5-10M
$10-30M
$30M +
2017 2019
15
22
21
42
8
45
22
26
100 100 100 100 100
Source: TechCrunch, Crunchbase, Company data, Pitchbook, Datafox

1
2
3
Market Snapshot
What’s Next?
Agenda
!24

1. The rise of the bots: “a robot for every person”
!25
What’s Next?
!25PROPRIETARY & CONFIDENTIAL - DO NOT COPY
* Daniel Dines, CEO, UI Path
Source: ZDnet, O’Reilly
Technology Media Fin. Ser. Telecom Healthcare Gov. Edu.
42
29
12
25
11
1616
49
55
59
46
60
53
48
9
16
29303032
36
Mature Practice Evaluation Stage Not Yet Using AI
Stage of AI adoption: reaching the tipping point?
% of respondent in given industry
• RPA and process mining leading the adoption
curve delivering unprecedented ROI in the
enterprise
• Horizontal bot platforms starting to emerge,
multiplying use cases (e.g., Rasa)
• Healthcare, education and government
evaluation can translate into massive impact

2. Ubiquitous APIs
!26
What’s Next?
$5B Revenue
Num rate
2015 TODAY 2015 TODAY
$34B
Revenue num rate
Valued at
$3.6B
Valued at
$22.5B
Valued at
$500M
$18B
Market cap
Valued at
$200M
Acquired
for $2B
Just raised
$13M seed
Valued at
$1B
Just raised  
$1M seed
Valued at
$1.5B
Just raised
$12M seed
Valued at
$2.65B
Just raised  
$2M seed
Valued at
$1B
Just raised  
$1M seed
$50M ARR
Just raised
$13M seed
$50M ARR
Source: TechCrunch

3. Security shifting left
!27
What’s Next?
Traditional
security
team
involvement
6xCheaper
Source: IBM System Science Institute
“after the fact”
Shift
left
security
“earliest point in the
development cycle”

4. Market correction
!28
What’s Next?
Source: JMP Securities
6.0
6.4
6.0
7.1
6.7
7.3
7.8
6.6
6.5
6.2
6.5 6.5
4.7
5.0 5.0
4.8
5.5 5.5
5.0 5.0 5.0
6.2
5.2
5.8
6.1
6.5
7.0
7.4
7.8
8.6
8.1
8.4
8.8
9.4 9.4
9.9
10.7
12.2
12.3
7.3
7.9
9.0
8.5 8.5
9.2
9.0
9.9
8.1
7.8
8.0
7.5
7.0
7.5
8.4 8.4
7.9
7.1
7.0 7.0
7.1
6.0
5.7
4.6 4.6
5.5
5.6
6.1
6.9 6.9 6.9 7.0
6.3
5.4
5.8
5.5 5.5
5.7
7.7 7.7
7.6
8.1
7.8
7.6 7.5
6.6
7.6
7.8
7.9
8.5
9.6
8.8
9.9
10.5
8.2
8.8
7.7
7.8
9.6
9.7
10.9
10.5
11.6
11.7
10.4
9.8
10.0
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
SaaS EV/Rev. multiples 2011-2019
?
20% ?
80% ?
Now is a good
time to raise
money. Don’t
wait!
2 years 2 years 3.5 years

5. EU SaaS Decacorns
!29
What’s Next?
First EU SMB SaaS Decacorn
5 Years
First EU SaaS Decacorn
3 Years
Source: Crystal Ball

Bonus
!30
What’s Next?
Each company mentioned in the
Accel 2019 Euroscape will receive
100+ calls and emails from VCs!

Thank you
!31

PROPRIETARY & CONFIDENTIAL - DO NOT COPY !32
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PROPRIETARY & CONFIDENTIAL - DO NOT COPY !33
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!34

The Rise of SaaS in Europe

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