A TL;DR version is available on Techcrunch.
When we started to work on a European cloud landscape our initial aim at Point Nine was simply to create a map with the logos of the most important European cloud companies organized by category. Easy right? Especially for “THE” European SaaS VC :-).
But as we wanted to create more value than just a map with a bunch of logos on it, we decided to take a more granular approach and to analyze this European ecosystem region by region. We also decided to crowdsource it.
Not only will it enable us to analyze the different ecosystems and their specificities in more details but it will also help us connect better with local players who have more knowledge than we do.
The current plan is:
- We’re publishing the SaaS landscape for France today. Since it’s a market I know really well (I’m French) and where we have several awesome investments, it was easier to start here and to show what we want to achieve for the other regions.
- In the coming months we’ll release the SaaS landscapes for the Scandinavian, German, UK, Benelux, Southern Europe and Eastern Europe regions.
- The heart of each landscape is a list of local cloud software startups from which we collect data and draw our analysis. These lists will be crowdsourced and available publicly.
- The different lists and analyses will be updated regularly. We see it as an continuous process rather than an one shot project.
We’re currently working on the landscape for the Scandinavian region, please send me an email (firstname.lastname@example.org) if you want to help and be part of it. If you want to be kept informed of the next releases you can subscribe to this email list.
1 - Startup List / Data Set
- Currently 200 French cloud software companies are listed, from early stage bootstrapped companies to public companies. Startups still in beta or acquired are not included in this list.
- 122 companies are VC backed (61%), the other 39% are either bootstrapped or companies for which we have no funding information.
For each company the data currently available includes:
- Name + URL + Crunchbase Link
- Type of SaaS: horizontal or vertical (and its industry if vertical)
- Software Category: developers, marketing & sales, support, HR etc.
- Total Raised: total amount raised in dollars
- Headquarters Location: some French startups have their headquarters in the US now, so the HQ location doesn’t have to be in France
- Employee Count: number of employees as listed on Crunchbase and LinkedIn
For more details about the data set please refer to the “Data Set FAQ” section at the bottom of this article where I explained how we built this list. For any other question: email@example.com.
2 - Horizontal vs Vertical Companies
Let’s start by defining what horizontal or vertical software means:
- Horizontal software = industry agnostic software (e.g.: Mention is a brand monitoring tool for businesses operating in any industry)
- Vertical software = software tailored for a specific industry (e.g.: Doctolib is an online booking SaaS for doctors only)
Percentage of horizontal and vertical companies for the complete list and for VC backed companies only:
As you can see the majority of the companies listed are horizontal products. And the proportion stays roughly the same whether we take into account the complete list or the VC backed startups only (around 65% — 35%).
This is not surprising as building a vertical software generally requires industry specific knowledge / insights which are harder to acquire (less entrepreneurs with these skills).
Let’s see if it changes when we take the headquarters location into account:
For French companies which have raised money and are headquartered in France the proportion between vertical and horizontal software is around the same (42% — 58%) whereas all French funded companies (in our list) now headquartered in the US are horizontal software.
This is a first hint at how vertical and horizontal companies grow differently. Horizontal startups tend to go to the US much earlier in their life to capture the US market as fast as possible since it’s their biggest market. And hence they move their headquarters on the other side of the Atlantic Ocean.
Since vertical software is much more “geography” dependent (local legal specificities, local industry rules and customers etc.) internationalization is done differently. They usually first dominate their home market and then expand on a country by country basis (with country managers and local offices but the headquarters generally stays in France).
3 - Software Categories
Here is what the distribution looks like in terms of software categories for the complete list. Note that we are limiting the analysis to “horizontal” startups only.
Vertical software companies answer industry specific needs or/and are vertically integrated and hence are way harder to categorize. So we’re not taking them into account here.
It seems that the Marketing and Developers categories are the most “popular” ones in our list with almost 40% of the startups listed.
Let’s look at the same graph but for VC backed companies only:
The distribution looks the same with Marketing stealing the first position to the Developers category. It seems like investors are keen on putting their money there.
We can also notice that the trailing categories, which are CRM & Sales, Collaboration-Productivity, BI-Analytics, Finance & Legal and HR, are all between 7.8% and 10%. Obviously security is obviously a small category as the talents and skills required to build security solutions are more scarce.
The combo Developers + Marketing + Sales & CRM accounts for more than 53% of our list of 200 companies.
4 - Funding
Now let’s have a look at the information we can extract from a funding perspective. Obviously we’re analyzing only VC backed startups and not taking into account bootstrapped ones.
If we analyze the complete list of funded startups (122) we can see that the average amount raised is $7.8M and the median is $2.5M. It’s hard to draw any strong conclusion based on this, so let’s compare that to the average and median funding for horizontal and vertical startups.
Funding: Horizontal vs Vertical
- average funding: $9.2M
- median funding: $2.5M
- average funding: $5.4M
- median funding: $2.3M
Interestingly horizontal companies raise more money than vertical ones on average ($9.2M vs $5.4M) but the value is almost the same for the median value ($2.5M vs $2.3M).
Out of the 12 companies which have raised more than $20M, 9 are horizontal (75%). It explains why there’s such a difference between the average values and not between the median values: there are many more horizontal companies which end up raising huge amount of money than vertical ones.
One hypothesis is that these very successful horizontal startups tend to go to the US more than vertical ones (7/9 of horizontal startups with $20M+ raised are headquartered in the US), where they can attract (and need) more money.
Since the vertical startups don’t have the same playbook, they first dominate their home market before expanding on a country / region basis, they tend to stay at home longer where it’s harder to attract “big money”.
But this trend is also changing with the maturation of the cloud market for many verticals. Out of the 3 vertical companies which have raised more than $20M two are relatively “new” players (Mirakl and Doctolib), so there’s definitely a “new generation” effect here. I think we’ll see this gap closing in the years to come with more ambitious vertical focused startups attracting big money from US investors.
We would, of course, love to hear your take on that in the comments.
Funding: US vs FR Headquarters
If we analyze funding by location of the headquarters we can notice a huge difference between US headquartered companies and the ones which keep their HQ in France:
French startups with FR HQ:
- average funding: $4.8M
- median funding: $2.3M
French startups with US HQ:
- average funding: $25M
- median funding: $11.8M
As you can see the differences are huge. Here is one interpretation:
- These cloud startups are successful / very promising, therefore they move to the US. And being successful also allows them to raise more money
- Because they are in the US, they have better access to capital
- And since costs are higher in the US, they also have to raise more
Again, don’t hesitate to share your own interpretation with us.
Funding by Category
As I’ve already explained it’s hard to use traditional categories for vertical software so the following graph concerns only horizontal startups.
- Let’s not look at Support where we have only 2 startups listed and one of them is iAdvize which has raised $17M.
- Developers is the category with the highest average value followed by HR. Part of the explanation is that several companies in the Developers space are open source products which can be extremely capital intensive (e.g.: Talend and Bonitasoft which have raised a combined $130M).
- If we look at the median values only, the Developers, Marketing, CRM & Sales and HR categories stand out with values above $3M. Then we have 5 categories with median values between $1M and $2M.
5 - Employee Count
Taking into account VC backed companies only, the number of 1–10 employees companies drops dramatically (more money, more employees):
6 - Headquarters
Cities where US headquarters are:
It’s not all about San Francisco and Silicon Valley as 44% of the US headquartered French companies listed are based in New York.
Thanks for reading and don’t hesitate to share your comments with us directly on Medium.
Data Set FAQ
Which cloud companies are included in the list?
- Companies are cloud software, meaning they provide a software available in the cloud (no on-premise or self hosted only products). This can be through a SaaS, an API or even open source if they also offer paid SaaS plans.
- We didn’t include startups with product in private beta or already acquired.
- Companies are initially created in France. We keep companies that have their headquarters in the US now.
Is this list of French cloud companies exhaustive?
Hell no. I wish but it’s not the case. I’m really aware of the limitation of such a study but I believe that done is better than perfect. This list is a starting point, we’ll keep adding companies and update the graphs. If you spot companies which are missing please contact me, I will be happy to add them (firstname.lastname@example.org).
How did you build this list?
We first listed French cloud companies by exploring sources such as:
- Angel List
- French VCs portfolio pages
- Various local directories and articles from French tech media (Maddyness, Frenchweb, Rudebaguette, Journal Du Net)
Both manually and through APIs.
Then we enriched our data thanks to the startup databases mentioned above (Crunchbase and Angel List) and also with Clearbit and LinkedIn.
One thing I can say for sure is that there is no silver bullet and no source is self sufficient. For example we found many interesting French companies not listed on Crunchbase (or with missing information).
Where can I see the list and its data?
Can you tell me a little more about the data available for each startup?
Startup name + URL + Crunchbase Link: self explanatory
Type: can be either Horizontal or Vertical
- Horizontal SaaS = industry agnostic software (e.g.: marketing solution usable by any business in any industry)
- Vertical SaaS = software tailored for a specific industry (e.g.: a marketing solution for the companies working in the food industry)
Category: macro software category
Currently we have:
- Collaboration — Productivity
- Finance & Legal
- CRM & Sales
A short note on software categories. First there is no perfect categorization, I tried to stick to what other firms like Bessemer or Emergence have done but I also simplified some categories like the “Developers” one which contains subcategories like developer tools, APIs, infrastructure etc. or bundled Marketing and Sales together.
Second for each startup I chose the category myself. I’ve checked the 200 companies listed and decided to which category they belong. Sometimes it’s clear and sometimes the line between two categories can be blurry for a tool. So I’m well aware that it might be subjective in some cases and I’m more than open to discuss changes.
Industry: the industry in case of a vertical software
Tags: some keywords or a short sentence used to describe the company / product
Raised: the amount of money raised (if the cell is empty it means I have no info)
Headquarters: location of the headquarters
Employees: number of employees, checked on Crunchbase + LinkedIn
Plenty of other data could be added like mobile, sales model (SMBs, mid-size / enterprise), etc. which we will probably add in the following months.