Euroscape 2022: Reset (Accel)

Summary

• Software and cloud giants with valuations above $100B lost approximately ~35% of their market capitalization.p.5
• Cloud software venture funding reached a record $230B since 2020 across the US, Europe, and Israel.p.19
• Europe and Israel count 122 cloud unicorns that have accumulated $44B in funding since January 2020.p.29

Key insights

1. Average public SaaS EV / NTM revenue multiples contracted to 5.7x in September 2022, dropping below the 10-year pre-COVID average of 6.1x.p.4
2. Software M&A activity is backed by ~$770B in total cash reserves, comprising $440B from strategic acquirers and $330B in private equity dry powder.p.18
3. Unicorn startups captured ~54% of all SaaS funding in the US, Europe, and Israel, receiving ~$125B since 2020.p.19
4. Approximately ~50% of European and Israeli cloud unicorns generate less than $100m in ARR.p.30
5. Finance, HR, and Legal software companies represent the single largest funding category within the 2022 Euroscape list at $8.0B total raised.p.38
6. Cloud security remains the top enterprise IT project priority as the global shift to the cloud is estimated to be around 40% complete.p.44