The 2021 Cloud 100 list is a ranking of the top private cloud companies compiled by Bessemer Venture Partners, Forbes, and Salesforce Ventures. Earlier this month, they released their Cloud 100 Benchmarks Report for 2021, highlighting the biggest trends since the list’s inaugural release back in 2016.
Cloud companies offer their software and services through the internet, enabling significant flexibility to consumers utilizing services. This flexibility also benefits cloud companies as they are able to provide their services to markets around the globe. When this robust business model met with the COVID-19 pandemic, investors were quick to realize the value of this infrastructure.
From 2020 to 2021 the value of the Cloud 100 increased 94% from $267B to $518B with 38% of the total value coming from the top 10 companies with Fintech leading as the most valuable subsector making up 28% of list value. Stripe, a digital infrastructure and fintech giant (which we covered in our Stripe Atlas, Removing Barriers and Advancing Entrepreneurship article), leads as the number one private cloud company valued at $95B. Fintech’s rise as the dominant subsector is a result of the demand for increased connectivity as technology penetration expands and structurally changes the way people handle money
Going back to highlighting the robust flexibility of cloud based companies, a growing number of Cloud 100 companies are coming from outside the U.S. Twenty seven companies from ten countries across the world are now featured in Cloud 100 with this number expected to rise as entrepreneurship becomes increasingly remote and economies develop. The increase in global service providers will allow entrepreneurs to seize more opportunities to scale up and level the playing field for entrepreneurs who may have previously lacked access to the top tools used by firms in developed countries.
Data shows that investors are now willing to pay premium prices for companies exhibiting growth rates similar to those now listed towards the top of the list. Fintech lends itself well to the SaaS revenue model that provides high-margin recurring revenue which we know investors love to see. This revenue structure, the practicality of the cloud, and availability of capital has reduced the average time it takes to become a Unicorn (reach a valuation of over $1B) from 12.1 years in 2016 to 8.6 years in 2021. This year alone welcomed 29 new Unicorns to the Cloud 100 list. This makes building cloud companies a lucrative pursuit for entrepreneurs and investors alike.
So what do all these trends mean for Endeavor Entrepreneurs and entrepreneurship? We’ve seen first-hand how cloud companies have been positively impacted in the past few years. Such is the case of Endeavor Entrepreneur Henrique Dubugras, CEO of Brex, who led his fintech firm to Unicorn status with a series D valuation of $7.4B in April of this year. That being said, we are hopeful that our Endeavor Miami companies Novopayment, Finconecta, and SellersFunding will take advantage of the opportunities and excitement surrounding cloud companies to scale up faster and join the ranks of Brex at the Unicorn level.