In this article, we are going to take a look at the 15 most valuable B2B SaaS companies. You can skip our detailed analysis of the B2B SaaS industry’s outlook for 2021, and go directly to the 5 Most Valuable B2B SaaS Companies.
Before we get into our list, let’s develop an understanding of what it means to be a B2B SaaS company and how the SaaS industry has evolved.
Business-to-Business Software as a Service, or B2B SaaS companies, refer to businesses that provide software solutions as a service to other businesses. Corporations need software for accounting, word processing, managing customer relationships (CRM), developing and optimizing organizational procedures, monitoring and surveillance, and we can go on. B2B SaaS companies offer cloud-based solutions to enterprises. They develop, create, update, and render applications from a hub, which are remotely accessible to organizations (their customers) via the “cloud”, which consists of servers provided by SaaS companies. B2B SaaS companies offer subscription plans to enterprise companies. Companies subscribe and pay a monthly, or yearly subscription fee to avail and make use of these cloud-based solutions.
The almost overnight shift from working in an office to working from home has led to disruptions in a lot of industries. Remote working has become the norm, and investing in on-premise systems has become an outdated practice. According to Global Software as a Service (SaaS) Market 2021-2025 report, the global Software as a Service (SaaS) market is expected to grow by $99.99 billion over a period of five years, 2021 to 2025.
This registers a compound annual growth rate (CAGR) of 11% over the forecasted period. It is identified that the rise in demand for cloud-based solutions among small and medium-sized enterprises (SMEs) will be the primary driver for this growth. According to Software as a service (SaaS) Global Market Report 2021: COVID 19 Impact and Recovery to 2030, the global Software as a Service (SaaS) market was valued at $225.6 billion in 2020 and as of 2021, is worth $272.49 billion. This represents a compound annual growth rate (CAGR) of 20.8%. This growth is a result of the recovery measures adopted by organizations to battle the implications of the coronavirus crisis, which included companies shifting their focus from traditional patterns and practices being followed to some out-of-the-box thinking, cloud-based solutions.
SaaS has proven to be a game-changer for organizations. The remote accessibility of cloud-based products makes them appealing to organizations. All they need to do is have a web browser to access the most powerful tools, that once had to be installed physically, on hard drives, hoarding system resources. There is no need to waste time downloading and installing updates since SaaS applications are updated on the server-side. Once the developer updates the software on the server, all clients have access to the improved, bug-free, and newer version of the software without going through the trouble to download and install updates. It is evident why organizations would prefer cloud-based solutions to traditional ones. Unlike traditional software, cloud-based applications are not vulnerable to piracy, do not need to be updated on the client-side, and do not hog memory.
The major players in the SaaS industry include, but are not limited to, SAP SE (NYSE: SAP), salesforce.com, inc. (NYSE: CRM), Adobe Inc. (NASDAQ: ADBE), Microsoft Corporation (NASDAQ: MSFT) and Oracle Corporation (NYSE: ORCL). According to statistics by statista.com, these 5 companies accounted for half of the total SaaS enterprise market share in 2019.
To compile our list of the 15 most valuable B2B SaaS companies, we first looked up companies that provide cloud-based solutions. We then separated companies that provided solutions for consumers, from companies that hosted products for enterprises. Finally, we sourced the market capitalization for each company from Yahoo Finance and ranked them by their market cap. Market capitalization is an important metric when it comes to determining the value of a business since it represents what an investor is willing to pay for a company’s stock.
Now that we have gained some insight, we are all set for diving into our list of the 15 most valuable B2B SaaS companies:
Most Valuable B2B SaaS Companies
15. Slack Technologies, Inc. (NYSE: WORK)
Market Cap: $26.22 billion
Slack Technologies, Inc. (NYSE: WORK) is known for its product, Slack, which is a platform that facilitates internal instant messaging, video conferencing, and intelligent productivity bots that help automate redundant tasks. Slack Technologies, Inc. (NYSE: WORK) reported total revenues of up to $902.6 million for their fiscal year 2021, which represents a 43% year-over-year increase in total revenues. The market value of Slack Technologies, Inc. (NYSE: WORK) stands at $26.22 billion, meriting its inclusion in our list of the 15 most valuable B2B SaaS companies.
Like HubSpot, Inc. (NYSE: HUBS), Snowflake Inc. (NYSE: SNOW), Square, Inc. (NYSE: SQ), SAP SE (NYSE: SAP), salesforce.com, inc. (NYSE: CRM), Adobe Inc. (NASDAQ: ADBE), Microsoft Corporation (NASDAQ: MSFT) and Oracle Corporation (NYSE: ORCL), Slack Technologies, Inc. (NYSE: WORK) is one of the most valuable SaaS companies in the world.
14. HubSpot, Inc. (NYSE: HUBS)
Market Cap: $26.30 billion
HubSpot, Inc. (NYSE: HUBS) is an American software company that focuses on cloud-based software solutions for inbound marketing, customer service, and sales. HubSpot, Inc. (NYSE: HUBS) is proud of its relatively powerful cloud-based marketing automation software. HubSpot, Inc. (NYSE: HUBS) was the pioneer of CRM and went on to provide various tools for Sales Performance Management (SPM), Help Desk Solutions, and Online Courses. Hubspot CRM, Hubspot Academy, and Hubspot Service Hub are just a few of its tools to name. HubSpot, Inc. (NYSE: HUBS) is worth $26.30 billion on the open market.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned HubSpot, Inc. (NYSE: HUBS). Here is what the fund said:
“HubSpot develops marketing automation software and is seeing strong uptake post-pandemic from small businesses that are far behind in digitally enabling their marketing, sales and related processes. HubSpot’s initial marketing product facilitates publishing of content to attract customers and nurture leads, but the company has seen growth accelerate as it makes progress selling a full suite of service and sales products to help with inbound customer support and converting leads.”
13. Veeva Systems Inc. (NYSE: VEEV)
Market Cap: $48.23 billion
At number 13 in our list of the 15 most valuable B2B SaaS companies, we have Veeva Systems Inc. (NYSE: VEEV), which is an American software company that provides cloud-based solutions for companies that belong to the pharmaceuticals and life sciences industry. Veeva Systems Inc. (NYSE: VEEV) is dedicated to customer success and has over 1000 customers, among which are some of the world’s largest pharmaceutical companies. Veeva Systems Inc. (NYSE: VEEV) offers a wide range of products that cover data analytics tools, CRM tools, automation tools, and many more. Veeva Systems Inc. (NYSE: VEEV) is worth $48.23 billion on the open market.
Like Square, Inc. (NYSE: SQ), Snowflake Inc. (NYSE: SNOW), SAP SE (NYSE: SAP), salesforce.com, inc. (NYSE: CRM), Adobe Inc. (NASDAQ: ADBE), Microsoft Corporation (NASDAQ: MSFT), Oracle Corporation (NYSE: ORCL), and ServiceNow, Inc. (NYSE: NOW), Veeva Systems Inc. (NYSE: VEEV) is one of the most valuable SaaS companies in the world.
Baron Funds, in its Q4 2020 investor letter, mentioned Veeva Systems Inc. (NYSE: VEEV). Here is what the fund said:
“Veeva Systems Inc. offers cloud-based software solutions for the life sciences industry. Its shares lagged during the quarter. Despite strong third quarter results, management offered a more cautious 2021 outlook, suggesting some headwinds to its commercial business. A new Presidential administration also caused some uncertainty about the regulatory environment for its key end-markets. We believe Veeva remains well positioned to benefit from the life science industry’s ongoing digitalization initiatives.”
12. Workday, Inc. (NASDAQ: WDAY)
Market Cap: $56.2 billion
Workday, Inc. (NASDAQ: WDAY) is an American software company that helps businesses manage their human resources, finances, strategies, data, and much more. Their products feature an array of tools designed and developed to aid in managerial processes. Workday, Inc. (NASDAQ: WDAY) claims to stand out since it breaks away from the traditional ERP model that is ridden with hard-coded features and is not as flexible as the “workday suite”.
The workday suite offers agility and robustness by bringing together financial management, human resource management, data analytics, and planning, all under one roof. Workday, Inc. (NASDAQ: WDAY) has a market capitalization of $56.2 billion, placing it at number 12 in our list of the 15 most valuable B2B SaaS companies.
Like HubSpot, Inc. (NYSE: HUBS), Slack Technologies, Inc. (NYSE: WORK), Snowflake Inc. (NYSE: SNOW), Square, Inc. (NYSE: SQ), SAP SE (NYSE: SAP), salesforce.com, inc. (NYSE: CRM), Adobe Inc. (NASDAQ: ADBE), Microsoft Corporation (NASDAQ: MSFT), Oracle Corporation (NYSE: ORCL), and Atlassian Corporation Plc (NASDAQ: TEAM), Workday, Inc. (NASDAQ: WDAY) is one of the most valuable SaaS companies in the world.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Workday, Inc. (NASDAQ: WDAY). Here is what ClearBridge Investments has to say about Workday, Inc. in its Q1 2021 investor letter:
“In addition to the new issue market, we have been tactically adding growth exposure. We took advantage of the selloff in disruptors that comprise a large portion of the portfolio to initiate a position in enterprise software maker Workday.”
11. Atlassian Corporation Plc (NASDAQ: TEAM)
Market Cap: $65.17 billion
Atlassian Corporation Plc (NASDAQ: TEAM) is an Australian software company that makes it possible for businesses to effectively and efficiently manage projects, facilitate intra-organization communication, guard and protect data and ensure businesses have what they need to reach their true potential.
Among its many cloud products, Atlassian Corporation Plc (NASDAQ: TEAM) offers Jira Software, Jira Service Management, Confluence, Bitbucket, Trello, and a lot more. Atlassian Corporation Plc (NASDAQ: TEAM) just launched Jira Work Management and is growing on to add more value to its suite of tools. Atlassian Corporation Plc (NASDAQ: TEAM) has over 150,000 satisfied customers and a market capitalization of $65.17 billion.
In the Q2 2021 investor letter of Lakehouse Capital, the fund mentioned Atlassian Corporation Plc (NASDAQ: TEAM). Here is what the fund said:
“Atlassian is one where we don’t have much to add. The co-founder-led business remains robust and was a very positive contributor to Fund performance over the course of its life — the Fund realised a +209% total return on the position — but the position had a de minimis impact on fiscal 2021 performance as we exited the small position we had left in October.”
10. Twilio Inc. (NYSE: TWLO)
Market Cap: $65.70 billion
Twilio Inc. (NYSE: TWLO) is an American cloud-computing company that offers web application programming interfaces that facilitate communications among businesses’ internal as well as external stakeholders. Twilio Inc. (NYSE: TWLO) offers software that facilitates multi-channel communication, which has the added effect of boosting customer’s user experience and in turn, enhances customer support. Over 172,000 businesses trust Twilio Inc. (NYSE: TWLO) for communication solutions with added enterprise-grade security and trust. Twilio Inc. (NYSE: TWLO) boasts a market capitalization of $65.70 billion, and it made it to the top 10 of our list of the 15 most valuable B2B SaaS companies.
Like HubSpot, Inc. (NYSE: HUBS), Slack Technologies, Inc. (NYSE: WORK), Snowflake Inc. (NYSE: SNOW), Square, Inc. (NYSE: SQ), SAP SE (NYSE: SAP), salesforce.com, inc. (NYSE: CRM), Adobe Inc. (NASDAQ: ADBE), Microsoft Corporation (NASDAQ: MSFT), and Oracle Corporation (NYSE: ORCL), Twilio Inc. (NYSE: TWLO) is one of the most valuable SaaS companies in the world.
In the Q2 2021 investor letter of Lakehouse Capital, they mentioned Twilio Inc. (NYSE: TWLO). Here is what the fund said:
“The Fund held 20 positions as of the end of June and exited four during the year (including) Twilio. The companies we exited were sold almost entirely on the basis of their valuations getting stretched well past their norms and to levels where the return profile no longer offered the asymmetric upside that led us to invest in the first place. We dislike selling on valuation as great growth companies are hard to find and letting winners run is an important facet of a winning growth strategy, however, we’re not gluttons for punishment either and in each of those cases we redeployed capital towards other high-quality growth companies with less demanding valuations.”
9. Snowflake Inc. (NYSE: SNOW)
Market Cap: $74.26 billion
Snowflake Inc. (NYSE: SNOW) is a cloud-based data warehousing company that provides enterprises with the functionality for data storage and data analytics. Snowflake Inc. (NYSE: SNOW) is a major player in the data-warehousing industry, and it was able to build and better a cloud-based data analytics and storage service, which allowed corporations like Office Depot, Pizza Hut, and Rakuten to save up enormously in terms of human resources, time and even operational costs. Snowflake Inc. (NYSE: SNOW) has over 3500 customers and boasts a market capitalization of $74.26 billion.
Like ServiceNow, Inc. (NYSE: NOW), Zoom Video Communications, Inc. (NASDAQ: ZM), Square, Inc. (NYSE: SQ), SAP SE (NYSE: SAP), salesforce.com, inc. (NYSE: CRM), Adobe Inc. (NASDAQ: ADBE), Microsoft Corporation (NASDAQ: MSFT) and Oracle Corporation (NYSE: ORCL), Snowflake Inc. (NYSE: SNOW) is one of the most valuable SaaS companies in the world.
RiverPark Funds, in its Q1 2021 investor letter, mentioned Snowflake Inc. (NYSE: SNOW). Here is what RiverPark Large Growth Fund has to say about Snowflake Inc. in its Q1 2021 investor letter:
8. Zoom Video Communications, Inc. (NASDAQ: ZM)
Market Cap: $106.65 billion
We have reached the top 10 of our list of the 15 most valuable B2B SaaS companies, with Zoom Video Communications, Inc. (NASDAQ: ZM) at number 8. Zoom Video Communications, Inc. (NASDAQ: ZM) did not let anyone feel any different by providing a tool not only for consumers but also corporations, that allowed everyone to continue their work routines just as they did in the good old, pre-pandemic days.
Zoom Video Communications, Inc. (NASDAQ: ZM) made it possible for everything to continue as it were by providing a cloud-based peer-to-peer platform for video telephony, online chat, and business telephone systems. Among Zoom’s trusted customers are ServiceNow, Inc. (NYSE: NOW), Atlassian Corporation Plc (NASDAQ: TEAM), Veeva Systems Inc. (NYSE: VEEV), and many more.
As of 2021, Zoom Video Communications, Inc. (NASDAQ: ZM) generated revenues of up to $2.7 billion and has a market capitalization of $106.65 billion.
7. Square, Inc. (NYSE: SQ)
Market Cap: $108.15 billion
Square, Inc. (NYSE: SQ) is an American company, based in San Francisco, that offers merchant services for businesses of all sizes. Businesses do not need to invest in cash registers anymore, with Square, Inc. (NYSE: SQ) providing innovative solutions for digital payments that allow businesses to efficiently manage their online stores. Square, Inc. (NYSE: SQ) boasts a market capitalization of $108.15 billion which gives it the 7th position in our list of the 15 most valuable B2B SaaS companies.
Like ServiceNow, Inc. (NYSE: NOW), Snowflake Inc. (NYSE: SNOW), SAP SE (NYSE: SAP), salesforce.com, inc. (NYSE: CRM), Adobe Inc. (NASDAQ: ADBE), Microsoft Corporation (NASDAQ: MSFT), and Oracle Corporation (NYSE: ORCL), Square, Inc. (NYSE: SQ) is one of the most valuable SaaS companies in the world.
6. ServiceNow, Inc. (NYSE: NOW)
Market Cap: $109.85 billion
ServiceNow, Inc. (NYSE: NOW) offers cloud-based automation solutions for enterprises to automate redundant and tedious tasks to optimize organizational performance. ServiceNow, Inc. (NYSE: NOW) allows for digitization of intra-company workflow, which has the effect of saving up human resources and cutting down on operational costs. Their products take care of a multitude of organizational operations including, but not limited to, IT Business Management, IT Operations Management, Dev Ops, and Security Operations. ServiceNow, Inc. (NYSE: NOW) boasts over 6000 customers, of which 80% come from the fortune 500. The market capitalization of ServiceNow, Inc. (NYSE: NOW) is valued at $109.85 billion, which merits its inclusion in our list of the 15 most valuable B2B SaaS companies.
Like Square, Inc. (NYSE: SQ), Snowflake Inc. (NYSE: SNOW), SAP SE (NYSE: SAP), salesforce.com, inc. (NYSE: CRM), Adobe Inc. (NASDAQ: ADBE), Microsoft Corporation (NASDAQ: MSFT), and Oracle Corporation (NYSE: ORCL), ServiceNow, Inc. (NYSE: NOW) is one of the most valuable SaaS companies in the world.
Palm Capital, in its Q1 2021 investor letter, mentioned ServiceNow, Inc. (NYSE: NOW). Here is what the fund said:
“ServiceNow provides software solutions to structure and automate various task and processes for large businesses. The company began in 2004 with a solution to help businesses manage the IT services they offer employees and customers. Unlike the existing solutions in the market, ServiceNow’s offering was built using modern architecture that was flexible, modular, and user-friendly. And it left the incumbents – large companies such as BMC, IBM and MicroFocus – playing catch up.
As the company grew to dominate this market, it saw the opportunity to expand its offering to include the broader task of IT Operations Management – or the monitoring and control of an entire business’s IT infrastructure. And over time its success in improving productivity and user experience in IT resulted in customers asking the company to expand its offering into other business workflows including HR Management and Customer Services – which it has since done…” (Click here to see the full text)
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Disclosure: None. 15 Most Valuable B2B SaaS Companies is originally published on Insider Monkey.
