Meet Philippe Botteri, Partner at Accel Partners

This is the very first of our series of interviews of European VCs investing in SaaS!

We chose Philippe Botteri, Partner at Accel Partners as he will be in Paris this Thursday for the “We Love SaaS” event at The Family and talk about “The Killer SaaS Pitch”!

Accel Partners

Created in 1983

Offices: Silicon Valley, London, Bangalore.

Investment focus: Investments $1M — $100M

Assets Under Management: $9B

Investment thesis:

• SaaS trends they look to invest in: “SMB Operating System”, API-driven products, Vertical SaaS, Enterprise mobile-driven services (like Docusign).
• 3 key elements when looking for investments: passionate founders, a differentiated product addressing a very large market opportunity and the startups’ growth metrics, → the “5C” of SaaS finance (CMRR, CAC, Churn, Cashburn and CLTV) completed by an additional “3Cs”: Cohorts, Clients concentration, and Country breakdown.

SaaS portfolio:

• Europe: Algolia, Doctolib, PeopleDoc, Qubit, CartoDB, Prezi, KDS
• US: Slack, Dropbox, Docusign, Squarespace, Cloudera, Qualtrics, SumoLogic, RelateIQ, Dealer.com, Responsys, Coremetrics, HasOffers, Airwatch
• India: Freshdesk, Atlassian

Insights from Philippe Botteri:

Why do you invest in SaaS?

I began my career at McKinsey and when the Internet bubble burst in 2001, I made a shift towards online software (ASP at the time). From then on, I remained convinced that SaaS was a much more efficient model, for both ISVs and customers — although many people remained skeptical on the viability of the model for a long time. Even in 2006, when I joined Bessemer Venture Partners, there was still a lot of skepticism in the Silicon Valley around SaaS (one of my first blog post in 2006 was titled: “Why I disagree with Tony Zingale — CEO of Mercury Interactive — on the future of SaaS). My SaaS focus at Accel Partners is the natural continuity of this path. Today is a very interesting time for the SaaS industry: Europe has shown it was capable of creating successful SaaS businesses, and it’s only the beginning.

What makes a good VC for a SaaS startup?

SaaS startups need to have a VC that understands the SaaS model, including market development strategies, upsell dynamics, sales incentive plan, etc. They also need VCs capable of financing their entire life cycle — on average, SaaS startups raise between $80 and $100 million before an IPO. Lastly, SaaS startups can only thrive if they become leaders in the US. As a consequence, they need a VC that has a strong international network and can help them develop their go to market successfully in the US.

What investment trend(s) do you foresee for 2020 in the SaaS industry?

• More and more champions will be built out of Europe.
• The SaaS infrastructure will become increasingly more driven by APIs: developers will use more API driven services like Algolia or Segment to reduce time to market and focus their dev resources on the part of their product which differentiate them.
• Mobile will drive new use cases.

Do you consider yourself to be in competition with U.S. VCs for SaaS startups?

We are an international VC, therefore we’re competing — and at the same time partnering! — with VCs everywhere in the world.

What’s the n°1 startup that you‘d like to have in your portfolio?

Zendesk — the 1st SaaS EU company to be listed on the Nasdaq

Go meet him this Thursday in Paris at the “We Love SaaS” event!

Philippe Botteri also has a blog → Cracking the Code. And to keep you updated about Accel Partners, follow their collection on Medium Accel Insights and read their post Reflecting on 2015 and looking ahead to 2016.