SaaStr 471: SaaStr CEO & Founder, Jason Lemkin and Byron Deeter, Partner at Bessemer Venture Partners, Discuss Why The Cloud is On Fire in 2021

The Cloud 100 Awards: A Digital Summit Recognizing Top Cloud and SaaS Companies

The Cloud 100 Awards, in partnership with Forbes magazine and Salesforce Ventures, recognizes the top 100 private cloud and SaaS companies. The event has transitioned to a digital format due to COVID, attracting tens of thousands of viewers. This year, the event will drop on August 10, featuring discussions with industry superstars like Reese Witherspoon and Larry Fitzgerald. The cloud industry is experiencing rapid growth, with companies maintaining over 40.2% average revenue growth. Although strategic M&A from platform vendors has been limited, private equity firms are increasingly interested in acquiring companies with modest growth rates and valuable business models.

Venture Financing in the Cloud Industry: A Higher Bar for Funding

Venture financing in the cloud industry has raised the bar for funding. Companies growing north of 100% with the potential to become $10 billion-plus companies are the ones attracting venture investments. Founders now strive for triple-digit growth rates of 200% and above, rather than settling for doubles. Team building and recruiting become crucial factors, as time becomes a limiting resource for active venture firms. Startups at $100 million or more need to demonstrate exceptional growth rates to secure funding, with companies regularly achieving 100% growth at this stage.

Increased Focus on Private Equity and Consolidation Strategies

Private equity firms are emerging as strong contenders for acquiring cloud companies, especially those with capital-efficient business models generating positive cash flow. They specialize in consolidation strategies, unlocking business efficiencies, and creating value by bringing together multiple assets. The shift towards private equity as an exit alternative is appealing to businesses that may not become multibillion-dollar companies. These companies, valued at $10 million or more with midling growth rates, often find attractive offers from private equity buyers. Private equity firms offer liquidity and growth opportunities, which, when combined with consolidation strategies, can lead to successful IPOs or sales to strategic buyers.

The Cloud and SaaS Market Outlook: Continuing Growth and Compelling Investment Themes

The cloud and SaaS market remain strong with continued growth and compelling investment themes. Cloud companies are experiencing rapid revenue growth, some even exceeding 100% at $100 million in revenue. The scalability and impact of SaaS companies have expanded beyond what was anticipated just a few years ago. With the potential to build trillion-dollar market cap businesses, venture firms are aiming for huge returns and partnerships with exceptional founders. The tech landscape is being redefined by cloud companies, which are driving global GDP and providing investors with rewarding opportunities for long-term investments.

The Official SaaStr Podcast: SaaS | Founders | Investors

SaaStr 471: SaaStr CEO & Founder, Jason Lemkin and Byron Deeter, Partner at Bessemer Venture Partners, Discuss Why The Cloud is On Fire in 2021

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The Cloud 100 Awards: A Digital Summit Recognizing Top Cloud and SaaS Companies

Venture Financing in the Cloud Industry: A Higher Bar for Funding

Increased Focus on Private Equity and Consolidation Strategies

The Cloud and SaaS Market Outlook: Continuing Growth and Compelling Investment Themes

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