Accel SaaS portfolio
- Europe: Algolia, Doctolib, PeopleDoc, Qubit, CartoDB, Prezi, KDS
- US: Slack, Dropbox, Docusign, Squarespace, Cloudera, Qualtrics, SumoLogic, RelateIQ, Dealer.com, Responsys, Coremetrics, HasOffers, Airwatch, Xero, Invoice2Go
- Asia: Freshdesk, Atlassian
SaaS trends I like
- “SMB Operating System”
- API-driven products
- Vertical SaaS
- Enterprise mobile-driven services (like Docusign)
What I look for in SaaS companies
- Passionate founders
- Differentiated product addressing a very large market opportunity
- SaaS metrics, → the “5C” of SaaS finance (CMRR, CAC, Churn, Cashburn and CLTV) completed by an additional “3Cs”: Cohorts, Clients concentration, and Country breakdown
Why do I invest in SaaS?
I began my career at McKinsey and when the Internet bubble burst in 2001, I made a shift towards online software (ASP at the time). From then on, I remained convinced that SaaS was a much more efficient model, for both ISVs and customers — although many people remained skeptical on the viability of the model for a long time. Even in 2006, when I joined Bessemer Venture Partners, there was still a lot of skepticism in the Silicon Valley around SaaS (one of my first blog post in 2006 was titled: “Why I disagree with Tony Zingale — CEO of Mercury Interactive — on the future of SaaS"). My SaaS focus at Accel Partners is the natural continuity of this path. Today is a very interesting time for the SaaS industry: Europe has shown it was capable of creating successful SaaS businesses, and it’s only the beginning.
What makes a good VC for a SaaS startup?
SaaS startups need to have a VC that understands the SaaS model, including market development strategies, upsell dynamics, sales incentive plan, etc. They also need VCs capable of financing their entire life cycle — on average, SaaS startups raise between $80 and $100 million before an IPO. Lastly, SaaS startups can only thrive if they become leaders in the US. As a consequence, they need a VC that has a strong international network and can help them develop their go to market successfully in the US.
What investment trends do I foresee for 2020 in the SaaS industry?
- More and more champions will be built out of Europe.
- The SaaS infrastructure will become increasingly more driven by APIs: developers will use more API driven services like Algolia or Segment to reduce time to market and focus their dev resources on the part of their product which differentiate them.
- Mobile will drive new use cases.
Do you consider yourself as competing with US VCs for SaaS startups?
We are a global VC, therefore we’re competing — and at the same time partnering! — with VCs everywhere in the world.
What’s the n°1 startup that you wish you had in your portfolio?
Zendesk — the 1st SaaS EU company to be listed on the Nasdaq
