Unicorn birth rate is at an all-time high and the cloud economy is officially entering the age of decacorns. Bessemer Venture Partners shares the industry trends that led to the creation of these massive private cloud companies. Releasing vital insights for founders with big ambitions, Byron Deeter, Elliott Robinson, and Mary D'Onofrio share the insights from benchmark data and key frameworks that power the fastest-growing businesses in technology.

1. State of the Cloud 2021
How To Build A Cloud Unicorn
Byron Deeter
PARTNER
@bdeeter
Elliott Robinson
PARTNER
@TheValuesVC
Mary D’Onofrio
PARTNER
@mcadonofrio

2. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Public cloud reaches $2.9 trillion
Total cloud market cap
Feb 2020
35% CAGR
Mar 2021
Sept 2021
$1T
$2.4T
140% CAGR
21% CAGR
65% CAGR
$0T
$1.5T
$3T
$2.9T

3. Cloud industry up 12x in eight years
0%
200%
400%
600%
800%
1,000%
1,200%
1,400%
Net Change
EMCLOUD
2013 2014 2015 2016 2017 2018 2019 2020 2021
INSTITUTIONALIZED WITH
NASDAQ AS EMCLOUD
September, 2018
Bessemer Cloud Index since launch

4. Cloud pulls ways from Internet and Mobile
0%
100%
200%
300%
400%
500%
600%
700%
800%
900%
1000%
2016 2017 2018 2019 2020
MT SAAS FAANG SPX DJI
MT SAAS
Performance:
Approx. +800%
S&P 500
Performance:
Approx. +70%
FAANG
Performance:
Approx. +330%
DJIA
Performance:
Approx. +65%
Five years of MT SAAS vs. FAANG performance

5. Changing of the guard: MT SAAS overtakes FAANG!
MT SAAS, EMCLOUD, FAANG, and Major Indexes Performance since 2020
-50%
0%
50%
100%
150%
Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21
Percent Change
EMCLOUD SPX DJI RUT MT SAAS FAANG
EMCLOUD
Performance:
Approx. +135%
MT SAAS
Performance:
Approx. +140%
Russell 2000
Performance:
Approx. +35%
FAANG
Performance:
Approx. +110%
S&P
Performance:
Approx. +35%
Dow Jones
Performance:
Approx. +20%

6. 2020 2021
$0B
$20B
$40B
$60B
$80B
$100B
$120B
$140B
$160B
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
* LinkedIn, First Unicorn in 2008
Zero to 150 unicorns in 14 years
New milestone: Every company on The Cloud 100 is a unicorn!
+74% YoY

7. Hello
Unicorns Total cumulative value
803 private unicorns $2,600B
100 C100 companies $518B

8. 2021 is on track of making tech history!

9. Proceeds from U.S. IPOs have reached $100.5 billion in 2021
Initial public offerings have come roaring back
42.7
54.9
85.3
30
18.8
35.5
54.2
46.4
78.2
100.5
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
$0B
$25B
$50B
$75B
$100B

10. 2020 2021
In the first half of 2021, VC invested more than $288 billion in
startups around the world
+157% YoY
$60.7B
Q2 2020
$156.2B
Q2 2021
37
40.5 40 43.3
62.7
57.3
62
57.9
68.7 70
78.8
68 69.2
65.3 63.1 61.1 60.7
80.4
100.4
136.2
156.2
$0B
$20B
$40B
$60B
$80B
$100B
$120B
$140B
$160B
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018 2019 2020 2021

11. VC realizations are for the record books
410+ $2.8T
$232B
Sold of tech startups
by VCs in 1H’21
Companies went public
on Nasdaq in H1’21
Global M&A topped
to a new high in H1’21

12. $0M
$10M
$20M
$30M
$40M
$50M
$60M
$70M
$80M
$90M
$100M
1 2 3 4 5 6 7 8 9 10 11 12 13
$ ARR in
Millions
Years from $1M
to $100M
We have a long history of helping cloud companies scale
from $1M to $100MM of ARR

13. Many category leaders are on the path to
$1 billion in ARR by the end of 2021
$ ARR in
Millions
Years from
$100M to $1B
$100M
$200M
$300M
$400M
$500M
$600M
$700M
$800M
$900M
$1,000M
0 1 2 3 4 5 6 7

15. In the cloud economy, scale wins.
1
2
3
4
5
6
7
8
9
10
Growth at optimal cost.
Invest behind the cloud sales
and marketing learning curve.
Product as a competitive advantage.
Master the 5 C’s of cloud finance.
Discover your secret KPI(s).
Customer success is company success.
Impact through engagement or insights.
Tone starts at the top.
Map your fuel stops.
(Bonus) Run the “Public Playbook.”
1
3
9
5

16. In the cloud economy,
scale wins
“Reaching scale not only
means you’ve captured a
large slice of the market,
but also that you’ve set the
pace of innovation for the
rest of the industry.”
Tobias Lütke
CEO & co-founder
LAW 1

17. In the cloud economy, scale wins
Video conferencing
64% 26% 10%
market share market share market share

18. A successful “Second Act” drives scale
Experimentation
Feature management
Voice, Video & Chat Email
Secrets
Provisioning
Networking
CORE TAM/PRODUCT “SECOND ACT”

19. The Second Act sparks a
virtuous cycle for market
leadership and expands your
TAM
$0M
$25M
$50M
$75M
$100M
$125M
$150M
$175M
$200M
2012 2013 2014 2015
Subscription Solutions Payment Solutions
CASE:
+112%
+109%
+95%
$23.7M
$50.3M
$105.0M
$205.2M

20. Payment solutions create
a new avenue for revenue
growth over time
CASE:
$0M
$25M
$50M
$75M
Subscription Solutions Payment Solutions
+120%
+93%
+107%

21. How payment solutions
unlocked revenue growth
for Toast
CASE:
$0M
$25M
$50M
$75M
$100M
$125M
$150M
$175M
$200M
$225M
$250M
Subscription Solutions Payment Solutions
+160%
+244%
+165%

22. 2013 2014
2012 2015 2016 2017 2018 2019 2020
K
10K
20K
30K
40K
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
27K
40K
14K
6K
1K
Toast’s accelerated customer growth via
product development
⁃ Re-branded to
“Toast”
- Online
Ordering
⁃ Point of Sale
⁃ Payment
Processing
⁃ Gift Cards
⁃ Loyalty
⁃ Kitchen
Display
System
- Multi-Location
Management/
Enterprise
- Menu
Management
- Labor
Reporting
- Inventory
- Kiosk
- API
- ToastGo
- Toast
Takeout
- Guest
Feedback
- Payroll & Team
Management
- Marketing
- Capital
- Toast
Hardware
- Toast Now
- Toast Delivery
Services
- Order & Pay
- Toast Go 2
CASE:
Number of
Restaurant
Locations
2011
⁃ Founded

23. Invest behind the cloud
sales and marketing
learning curve
“Be cautious with investments
as you test and iterate. Fail fast.
Be aggressive and scale your go-
to-market when something is
really working.”
Tooey Courtemanche
CEO & co-founder
LAW 3

24. Nail it before you scale it!
In the New Normal, you really have to nail it before
you scale it
INITIATION
Founder Led Sales
TRANSITION
Sales Led Sales
EXECUTION
Scalable S&M

25. INITIATION
Founder Led Sales
TRANSITION
Sales Led Sales
EXECUTION
Scalable S&M
How Procore ramped their sales
and marketing learning curve
Despite facing skeptics,
CEO Tooey Courtemanche
never gave up.
“Nothing was going to stop me. And
we were always able to find
a few early adopters and people that
believed in it to keep going.”
CASE:
Procore’s leadership team began
professionalizing Procore’s go-to-
market engine in earnest.
With the benefit of Dennis Lyandres, a
phenomenal sales leader,
Procore invested intelligently
and aggressively
The approach proved key to building a
powerful sales and customer success
organization that could tackle different
market segments, from small and mid-sized
builders to large companies
In the first year of our investment, Procore
more than doubled its ARR growth rate

26. Product-led
growth
Usage-based
pricing
Cloud
Marketplaces
Three GTM strategies top cloud companies
employ in the New Normal

27. Aim for a GTM flywheel that creates champions,
not a static funnel
Champion
Captivate
Catalyze
Cultivate
Cycle of
creating
champions

28. Fire up the flywheel to drive momentum
Champion
Captivate
Catalyze
Cultivate
Cycle of
creating
champions
Established a diverse customer advisory
board and doubled the number of
champions
Grew alongside customers by
developing proprietary dashboards to
help them optimize usage and costs
Deployed a remote-first playbook for
strategic involvement and virtual
enablement trainings focused on
scalability and self-sufficiency
Provided dedicated support SWAT teams
during promotions and upgrades
Amplified individual user voices
through customer-led marketing
initiatives (#ThingsCustomersSay series,
Inaugural customer survey)
Renewed content marketing with a
focus on interactive, educational pieces
and thought leadership
Shortened time-to-value for customers
by 75 days even with a fully-distributed
workforce
Developed a culture of project
partnership with customer-centric
product innovation and cross-functional
collaboration

29. Results from Hyperscience’s flywheel
250% YoY ARR growth
10x increase in platform usage
140% overall account growth
170% net ARR retention
Peter Brodsky, CEO and Co-Founder of Hyperscience

30. The 5 C’s of Cloud
“Driving rigor and maintaining
cadence in the review of KPI’s
increases collective learning for
your team, helps leaders spot
issues and opportunities early,
and builds operational
discipline that scales.”
Jennifer Tejada
CEO
LAW 5

31. The 5 C’s of Cloud Finance
The 5 metrics you should use to track and to measure your cloud business
GOOD
BETTER
BEST
50-100%
CARR
% Growth
Series A/B
100-200%
200%+
1 CAC Payback
Months
Enterprise
2
24
12-24
<12
3x
CLTV
3-5x
5x+
3 Churn
%
Enterprise
4
Net Negative
10%
Net Negative
10-20%
Net Negative
20%+
-50-0%
CASH FLOW
% Margin
Breakeven
CF+
5

32. Introducing Cash
Conversion Score
A new measure of cloud health
Current CARR
Total Capital Raised To Date – Cash
(Equity + Debt – Cash)

33. Good, Better, Best: Cash Conversion Score
A new measure of cloud health
GOOD
CASH CONVERSION
SCORE
INTERNAL RATE OF
RETURN
0.25-0.5x
40%
0.5-1.0x
80%
1.0x
120%
BETTER BEST

34. The 6 C’s of Cloud Finance
The 6 metrics you should use to track and to measure your cloud business
0.25-0.5x
CCS
0.0x
0.5-1x
1x+
6
50-100%
CARR
% Growth
Series A/B
100-200%
200%+
1
CAC Payback
Months
Enterprise
2
24
12-24
<12
3x
CLTV
3-5x
5x+
3
Churn
%
Enterprise
4
Net Negative
10%
Net Negative
10-20%
Net Negative
20%+
-50-0%
CASH FLOW
% Margin
Breakeven
CF+
5
GOOD
BETTER
BEST

36. The Age of Cloud
Decacorns
Cloud #1
Average Valuation
$19.9Bn
#1
#2
#3
#4
#5
#6
#7
#8
#9
#10
* *
*Now public
Top 10 2021 Cloud 100 Companies

37. 0.3
0.8 0.5 0.7 1.1
1.8
1.1 1.2 1.4 1.7
2.7
5.2
3.4
4.0
4.8
6.0
9.4
19.9
$0B
$2B
$4B
$6B
$8B
$10B
$12B
$14B
$16B
$18B
$20B
2016 2017 2018 2019 2020 2021
Average Cloud 90-100 Valuation Average Cloud 100 Company Valuation Average Cloud 1-10 Valuation
Average Cloud 100 Company Valuations
Over Time
Cloud 1-10
+$16.6Bn
43% CAGR
Cloud 100
+$4.1Bn
38% CAGR
Cloud 90-100
+$1.5Bn
44% CAGR
The average 2021 Cloud 100 company is worth $5.2Bn, up +$2.5Bn YoY
6Y Growth

38. 9x
8x
11x
13x
23x
34x
2016 2017 2018 2019 2020 2021
Average
270%
Cloud 100 Multiples
Cloud multiples
continue to rise
ARR multiples increased
+270% since 2016 to 34x, up
from 23x just a year ago

39. 65%
95%
100% 100%
Cloud 100 Growth Rates
2017 2018 2019 2020
110%
2021
60%
Average Top quartile
65%
90%
80% 90%
Cloud growth rates
continue to
accelerate
The average Cloud 100 company
grew +90% YoY in 2021, and the
top quartile companies grew
+110% YoY, faster than ever
before

40. Growth-adjusted
multiples increase
as well
0.1x
0.2x
0.1x
0.3x
0.4x
2019
Average
2021
2020
2018
2017
180%
Growth-adjusted multiples have
increased 180% in the last 5 years,
indicating investor demand for
cloud assets
Cloud 100 Growth-Adjusted Multiples

41. MessageBird
Mailchimp
OneTrust
Calendly
CS Disco Razorpay
Contentful
Klaviyo
Datarobot
Snyk
Outsystems
Avidxchange
ActiveCampaign
OwnBackup
Exabeam
Figma
Gitlab
Airtable
Samsara
Carta
Gusto
Scale AI
Miro
Amplitude
Grammerly
Notion
Checkr
Postman
Automattic
Benchling
Kong
Webflow
Keep Truckin
Flutterwave
Loom
6Sense
ThoughtSpot
Netskope
Yardi
Tripactions
Gong.io
Rubrik
Checkout.com
Rapyd
Workato
Outreach
Icertis
Highspot
Tanium
Cohesity
Automation Anywhere
Lucid
MX
Podium
Entrata
Braze
Invision
Cedar
Chainalysis
Cockroach Labs
Dataminr
Grafana Labs
Riskified
Sisense
BigID
Socure
VTS
HighRadius
Attentive
Pendo
Celonis
BrowserStack
Fanruan
JST Network
Airwallex
Culture Amp
The rise of cloud is a global phenomenon
Best-in-class cloud companies can be found all around the world, as evidenced
by this year’s Cloud 100 Honorees
* Based on founding location or primary office listed in Pitchbook, CapIQ, Crunchbase
Freshworks
Talkdesk
Hopin

42. 146
71
63
56
43
33
31
29
18
14
14
$0B $20B $40B $60B $80B $100B $120B $140B $160B
Fintech
S&M/CX
Data/Infra
Des/Coll/Prod
Vertical
Developer
Security
Automation
Finance/Legal
HR
BI/Analytics
Total Cloud 100
List Valuation
by Subsector
Fintech category leads
subsegment total valuation after
big YoY move, followed by
sales/marketing/CX
Sum of 2021 Cloud 100 Valuations
Sum of 2020 Cloud 100 Valuations
Sum of 2019 Cloud 100 Valuations
VALUATIONS

43. Data Infrastructure Fintech
Massive growth in data infrastructure and fintech
Total Cloud 100 List
Valuation by Subsector
$37.3B
$52.3B
$63B
$25.7B
$45.4B
$146B
2019 2020 2021 2019 2020 2021
+461%
+70%

44. 1. Unbundling of the Office
2. We’re bringing S-M-B back with SaaS
3. Diversity, equity, and inclusion software take their rightful place
4. Data and machine learning infrastructure accelerates to new heights
5. The rise of the “citizen” developer and creator
6. Fintech and crypto players are changing financial services forever
7. The vertical SaaS wave becomes a tsunami
2021 Predictions

45. Prediction 1: The unbundling of the Office
CALENDARS
PROJECT MANAGEMENT VIRTUAL OFFICE/TEAM ROOM
EMAILS/MESSAGING
EVENTS COLLABORATIONS

46. Prediction 2: We’re bringing S-M-B back with SaaS
SALES & MARKETING
VERTICAL
IT/OPS
CUSTOMER HR FINANCE/LEGAL

47. Prediction 3: Diversity, equity, and inclusion software
take their rightful place
DATA TRACKING/TALENT MANAGEMENT DEI CULTURE TRAINING & EDICATION
REPORTING RECRUITING

48. Prediction 4: Data and machine learning infrastructure
accelerates to new heights
AI/ML OPS DATA MONITORING
DATA
VISUALIZATION
DATA PIPELINE
DATA MANAGEMENT/
GOVERNANCE
DATA
ANALYTICS/SCIENCE

49. Prediction 5: The rise of the “citizen” developer and
creator
NO CODE/LOW-CODE APP-BUILDING TOOLS
CREATOR EMPOWEREMENT TOOLS

50. Prediction 6: Fintech and crypto players are changing
financial services forever
BANKING-AS-A-SERVICE
& CARD ISSUANCE
B2C & B2B LENDING IDENTITY / FRAUD
B2C & B2B PAYMENTS BROKERAGE /
WEALTH MGMT
CRYPTO

51. Prediction 7: The vertical SaaS wave becomes
a tsunami
AUTO REPAIR
FIELD SERVICES
EDUCATION
LEGAL NETWORKING
BANKING DENTAL
EARLY EDUCATION
REAL ESTATE
PUBLIC SECTOR HEALTHCARE
BARBERSHOP
REAL ESTATE AGENTS
SALON & SPA
LAUNDRY OPERATING
PLATFORM
CONSTRUCTION SHIFT WORKING

52. How to build a
cloud unicorn
Top takeaways
1. Every company on the Cloud 100 is now a unicorn; the industry has grown from zero to 150 cloud unicorns
in 14 years! The average 2021 Cloud 100 company is worth $5.2Bn, up +$2.5Bn YoY
2. The 10 Laws of Cloud are time tested lessons that help startups grow into category leaders.
4. GTM strategies have adapted to the New Normal, best practices include product-led growth,
usage-based pricing, and the adoption of cloud marketplaces.
3. In the cloud economy scale wins; the Second Act sparks a virtuous cycle for market leadership.
5. The 6 C’s of Cloud Finance help companies measure and scale operationally efficient businesses.

53. Resources
How to Build a Cloud
Unicorn
Scaling to $100 Million
bvp.com/scale
The New Cloud Index
bvp.com/cloudindex
Go to bvp.com/cloud

54. Even in the New Normal,
we’re living in an age of unicorns.
Byron Deeter
PARTNER
@bdeeter
Elliott Robinson
PARTNER
@TheValuesVC
Mary D’Onofrio
PARTNER
@mcadonofrio

55. Resources
How to Build a Cloud
Unicorn
Scaling to $100 Million
bvp.com/scale
The New Cloud Index
bvp.com/cloudindex
Go to bvp.com/cloud

56. Thank You
bvp.com/cloud
@BessemerVP