Most of you know that I am big fan of B2B SaaS. I absolutely love the business model and had the opportunity to work with and learn from some of Europe’s fastest growing SaaS businesses such as RedPoints in Spain or Walkme, Wix and Tailorbrands in Israel.
Europe is becoming a power house in B2B SaaS. The continent has created many great SaaS businesses in the past with billion dollar outcomes such as Wix, Zendesk, SuccessFactors, Trusteer, AVG, Mimecast, Conduit and Fleetmatics. And the trend continues with many big recent funding rounds such Front, Aircall and ContentSquare in Paris, Showpad in Gent, Peakon and Templafy in Copenhagen, Contentful in Berlin, Beamery in London, UiPath in Bucharest and Travelperk in Barcelona among others.
So, why am I talking now about B2C SaaS?
Well, because Spotify’s IPO success marked the debut of a new era - the rise of B2C SaaS in Europe. This IPO is indeed part of a bigger trend. Besides the stars in music and traditional media such as Netflix, there aren’t many consumer subscription services of scale yet today. But there is a change in the way people consume digital content and services across age groups and verticals. And everyone benefits. While consumers can explore and discover, service providers benefit from the attractive financial characteristics of the SaaS business model.
Having backed two B2C SaaS businesses in this year already (more on this soon) and seeing an increasing number being created across the continent, I am extremely excited about the B2C opportunities that lie ahead of us in the coming years. European winners are already emerging with the likes of Flo, Blinkist, 8fit, etc.
So what are the key drivers behind SaaS businesses and how are the B2B and B2C models different? Where do they excel 🚀 and in which areas are they ‘only’ strong 💪?
The comparison clearly explains why I am so excited about the B2C opportunity. Most of what makes a B2B SaaS business so strong can be applied to B2C. A well executed freemium model (and we know a thing or two about freemium models 🤓) coupled with an amazing mobile experience leveraging the mass market and word of mouth potential will lead to many winners in the coming years. Listen to this! Best in class B2C SaaS business tend to have an organic growth of up to 75% with a blended CAC of less than one dollar at scale…!
With smartphone adoption at an all time high and having even reached a penetration of 80%+ among seniors in the Western world (But more about the elderly opportunity in a new post soon as one of the companies I backed recently is in this space 😜), I strongly believe that many verticals (from health & fitness, work, healthcare, caretaking, education and so on) will be disrupted by new digital products. New formats such as voice will accelerate this evolution by allowing to turn more and more services into digital B2C SaaS products 🚀
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So if you’re are building a B2C or B2B SaaS business, I am your guy ;) Feel free to reach out. I have lots of learnings from our SaaS businesses and would love to talk. If you are an investor and just curious about the space, feel free to reach out as well.