SaaS is one of the hottest sectors for VC investment right now. We break down what’s been happening in the space in 11 charts.
2014 SEES SAAS COMPANIES RAISE $2.5B+ EACH QUARTER
VC-backed SaaS companies raised $2.5B+ in all four quarters of 2014. Q2’14 saw the highest quarterly amount deployed over the past 4 years due to $100M+ deals including Automattic, Flatiron Health, Anaplan and Insidesales.com.
CALI SaaS INVESTMENT GREATER THAN ALL OTHER STATES COMBINED
California-based VC-backed SaaS companies have raised $16.6B from 2011 – 2014, more than all other states combined, which raised a cumulative $11.7B.
500 STARTUPS, SV ANGEL, A16Z LEAD SaaS VCs
500 Startups has been the most active SaaS VC over the past four years. SV Angel is the second most active, investing in companies like Zenefits, Github, and Domo Technologies. Andreessen Horowitz rounded out the top three with notable investments that included Box, Slack, and Lookout.
DROPBOX TOPS LARGEST SaaS DEALS IN 2014
Dropbox’s Series C was the largest SaaS deal in 2014, followed by SurveyMonkey’s $250M growth round and Automattic’s $160M Series C.
THE TOP 5 AREAS FOR SaaS INVESTMENTS
BI, Analytics & Performance Management companies dominated the bulk of the deals and dollars for VC-backed SaaS investments over the past four years. CRM was second in deals but was followed closely by Advertising, Sales, and Marketing.
VC-BACKED SaaS EXITS UP 66% YOY
VC-backed SaaS IPOs and M&As both reached four year highs in 2014. The 2014 Class of SaaS IPOs included Hubspot, New Relic, Castlight Health and Zendesk among others while notable acquisitions included VMWare’s $1.5B purchase of AirWatch and Salesforce’s $390M acquisition of RelateIQ.
HALF OF ALL EXITED SaaS COMPANIES RAISED <$10M
49% of all VC-backed SaaS exits raised less than $10M before exiting since 2011. At the other end of the spectrum, 7% raised over $100M including LinkedIn, Workday and ExactTarget.
THE TOP 5 SaaS ACQUIRERS – ORACLE LEADS
Oracle, the company notorious for its acquisition prowess, led all acquirers of VC-backed SaaS companies over the past four years with over 10 deals. Notable acquisitions included BlueKai, TOA Technologies and Vitrue.
4% OF SaaS EXITS ARE UNICORNS
Less than 5% of VC-backed SaaS companies saw disclosed exit valuations at or above $1B. Of companies with disclosed valuations at exit, 11% exited for $1B+ including Workday, Veeva Systems, and LinkedIn, among others. On the other end of the spectrum, 30% of all exits with disclosed valuations were below $100M
BI COMPANIES DOMINATE IN EXITS
BI, Analytics & Performance Management led all subindustries in exits, with 87 total VC-backed exits since 2011. Notable exits included Splunk, The Climate Corp, and New Relic. Ad, Sales & Marketing was second with 59 exits, while CRM was third with 38 exits.
WORKDAY IPO TOPS SaaS EXITS
The top 10 SaaS exits over the past four years were dominated by IPOs, with Workday’s IPO which valued the company at $4.49B leading the way. Veeva Systems was second with one of the most capital efficient VC-backed exits of all-time, having raised just $4M before its $4.4B IPO.
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