2019 Was A Breakout Year For B2B SaaS Startups in Germany

The BVP Nasdaq Emerging Cloud Index (EMCLOUD) tracks 48 SaaS companies. Some are industry stalwarts such as Adobe, others are recently IPO’d companies such as Slack and Zoom. The EMCLOUD index rose 47% in 2019 and far outperformed any other indices including the tech heavy NASDAQ. 

 

There was not a single public B2B SaaS company in Germany as of 2018 . (Wirecard is publicly traded but does not have the subscription business model typically associated with SaaS). This embarrassing situation finally changed when Teamviewer went public in September 2019 at a share price of €25.30 and ended the year at €31.88, an increase of 26%. Teamviewer was founded in 2005 and is a leader for remote access and desktop sharing are in the transition from an on premise to a SaaS model. Teamviewer’s expected 2019 revenues are approximately €400 million and the end of year market capitalization stands at €6 billion.

The next largest relevant exit in the B2B space was Data Artisans’ sale to Alibaba for $90 million.

If the list of publicly traded B2B SaaS companies is limited to one, what about the pipeline of privately held B2B SaaS companies? As of 2018 only two things would have stood out: Celonis became a SaaS unicorn, and IoT company Relayr exited for 300 million. After that - nothing. Nada. Nimic. Rien. Nichts.

 

Privately held Celonis continues to grow on a global scale and the latest round now values Celonis as a ‘duocorn’ worth more than €2 billion. The company has strengthened its executive ranks to complement the three person founder team in the quest to get IPO ready. There are no other private B2B SaaS unicorns, and there is no other SaaS company that is valued higher than €500 million at the time of writing. 

2019 saw a flood of funding pour into the most promising B2B startups, and the largest SaaS players cumulatively raised $900 million in just their last funding rounds (It is worth noting that some of these investments were spent on secondaries and the money going into the companies was less than the amounts listed below and communicated to the public). 

Five companies appear to be valued as high or higher than Relayr at their $300 million exit in 2018: 

• Personio provides an HR suite for SMBs and vaulted ahead to a  $300+ million valuation after a large €60 million round in December 2019 after a prior round just in January.

• Signavio is a global leader in business process management, also raised a large round, although much of it was a secondary sale by the existing shareholders and only a smaller amount went into funding the growth of the company. The founders still own a very significant share of the company.

• Sennder also raised two large rounds in July and April of 2019.

• Scoutbee has been on an absolute tear since its founding in 2015 and has closed a large round in December after a prior raise only six months earlier. What first looked like a Web 1.0 era supplier listing tool on steroids is quickly evolving into a strategic sourcing vendor.

• Commercetools had been flying under the radar since its acquisition by REWE 2015, but Insight Partners saw an opportunity to acquire the company from REWE. It does not appear that any money went directly into funding further growth right now.

The list of highest valued B2B SaaS companies is rounded out by Proglove, PowerCloud, Contentful, Wundermobility, and KONUX which are currently valued between $300 million and $200 million (the SaaS list excludes Auto1 who buy and sell actual cars and Adjust whose revenue model is based on transactions as opposed to subscriptions). 

2019 was a ‘golden’ year for startups in Germany to raise growth capital. The five largest B2C players (Flixbus, GetYourGuide, Frontier Car Group, N26  and SumUp) collectively raised €1952 million where each investment was larger than the $290 million raised by Celonis.

Marquee investors will provide the ammunition for Series B and beyond if they believe that these companies can become global category leaders with a clear path to exit: Accel is an investor in both Celonis and Personio. Insight Partners invested in Staffbase in addition to Commercetools and Lean IX. 

And there is an abundance of seed and series A capital available from German venture capital firms to fuel the fire.

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