The next billion-dollar enterprise software company will be born outside the United States.
The market fundamentals behind this $ 1 trillion software sector are clear. Developers are in control of the transformation of all enterprises into software enterprises, accelerated only by pandemics. They want to choose their own tools, technologies, and platforms rather than products imposed by their employers. Therefore, enterprise software companies that understand and meet the needs of developers will generate hundreds of millions of dollars in revenue over the next few years.
But what sets this next $ 1 trillion wave of enterprise software apart is unlike previous waves of SaaS software and public clouds, and the next $ 1 billion enterprise company could be born in any country. Most large software companies today are headquartered in the United States, but in the coming years, billions of dollars of corporate leaders will emerge in Europe, Asia, Israel and Latin America. This is because the essence of developer-led software provides a fertile foundation for developer-focused entrepreneurs to set up a company everywhere. Developers don’t care if good open-source code or APIs were launched in Boston, Bangalore, or Buenos Aires, they just want to use the best platform available. Also accustomed to collaborating with developers around the world, sharing ideas in forums, writing code for global open source projects, and reading articles written by peers working on similar projects. I am.
Already, developer-focused software companies have emerged around the world and have achieved or will achieve billions of dollars in valuations. For example, JFrog launched in September 2020, an Israeli-born software company that is currently worth more than $ 4 billion. Postman in the midst of a pandemic, a US / Bangalore company building a collaboration platform for API development announced a $ 150 million Series C round with a $ 2 billion valuation. BrowserStack India’s cloud web and mobile testing platform completed a $ 200 million round in June of this year with a $ 4 billion valuation.
Early-stage developer-led software companies that were born outside the United States and have multi-billion dollar businesses on track are stream, A leader in API-driven chat messaging and activity feed solutions founded in Amsterdam. Lhasa, Developer of open source conversational AI tools founded in Berlin. Evervault, Dublin-based provider of encryption tools for developers. Nozomi Network, IoT security leader founded in Switzerland. Superbase, Singapore-based early-stage open-source database company. And Gina, An open-source AI company based in Berlin with a development team in China. All of these companies have developers who use their products around the world and sell to corporate customers around the world.
Venture capital investors have traditionally focused on funding US-based enterprise software companies, but now that the focus has shifted to developer-led software, opportunities are everywhere. Investment trends show a shift towards global investment in enterprise software companies. Analyzing pitchbook data showing the total amount of venture capital invested in enterprise software companies around the world between 2017 and 2021, investors are companies outside the United States. It turns out that we are supporting more and more. Go to the pace of change. In 2017, the U.S. won 69% of total venture dollars invested in enterprise software companies, dropping to 49% in 2018, when transactions in China and Singapore surged, and rising to 61% by 2020. It is predicted. By 2021, the United States will account for 59% of total venture investment in enterprise companies. Companies that have continued to earn investment over the past five years include Germany, the United Kingdom and Spain, while Israel, France and Brazil have generally been strong.
If a pandemic proves something, it means that countries around the world are deeply connected, and software developers have known it for years. Whether the developers live in Bangalore or Budapest, they want the best tools for their work, no matter where they were originally created. We also collaborate with each other through forums, Github, shared projects and the open-source community. An enterprise software company that builds tools and platforms for the global developer community and truly understands the needs and ideas of this diverse group is well-suited to become a billion-dollar brand.