Guide
In the second half of 2015, the SaaS industry became an investment hub, and a large number of institutions such as Jingwei, Sequoia, and IDG entered the market. However, in the first half of this year, the amount of financing for entrepreneurship in the SaaS sector has decreased significantly. In the first quarter, nearly 20 SaaS companies have closed down and laid off employees. Is the investment in SaaS already passed, and where is the company's future?
In the second half of 2015, under the influence of the capital winter, the entrepreneurial project developed by the 2C money-burning model was cold. The SaaS (Software as a Service English Abbreviation) project in the 2B field has gradually emerged as a result of the robustness of enterprise-level customers. For a time, a large number of investment institutions such as Jingwei, Sequoia, and IDG Capital entered the market.
However, in the first half of this year, the amount of financing for entrepreneurial projects in the SaaS sector has decreased significantly compared to the previous two years, and many SaaS companies have exposed information on layoffs. The full-time founder Chen Xuejun mentioned in a public speech in August this year that in the first quarter of this year, SaaS, which received the A round of investment, has closed down 19 companies. "I believe this number will increase in the next few quarters."
What is the outlook for the SaaS industry, and has it passed the investment climate? For SaaS companies, where is the company going in the future?
Enterprise demand for efficiency drives SaaS development
"Due to the development of the underlying technologies such as communication, computing, storage, etc., China is in the era of rapid informationization. The popularity of smart phones has made China's personal informationization basically realized. However, enterprise informationization has not been well settled in China. This is especially true for SMEs,†Wang Donghui, founding managing partner of Amoeba Capital, said in an interview recently.
In the past, there was a large amount of cheap labor in China, and companies did not have the motivation to pay for efficiency. But now China's demographic dividend is gradually disappearing, the cost advantage of labor is not obvious, and any industry needs to improve efficiency. This is inseparable from the process of informationization. Only with sufficient informationization, upstream manufacturers can accurately grasp downstream information, effectively organize production, inventory and capital, and promote the mutual coordination of the entire ecology.
As a result, Amoeba Capital has been focusing on corporate informationization since its inception in 2011. "The most prominent opportunity in enterprise informatization is SaaS, because the SaaS platform can help companies improve the efficiency of information flow, logistics, and capital flow." Wang Donghui said.
In addition, for entrepreneurs, if you still insist on doing traffic business, it is difficult to avoid the Internet giants such as BAT. To bypass BAT, SaaS is a good choice. Because there are many elements in vertical SaaS based on the particularity of the industry itself, it is not accessible to BAT.
After the completion of the second fund in 1995, Amoeba Capital accelerated its efforts in the field of SaaS. Wang Donghui said that 40% of the 60 projects invested by the company's second-phase fund are focused on the vertical SaaS field, including the unlimited SaaS platform instruction, the two-dimensional fire of the SaaS platform, the SaaS platform, and the e-commerce SaaS. Platform gathering pool, education SaaS platform Xiaoyang education.
“When we first invested in SaaS five or six years ago, the industry is still in dispute whether we can receive the money. Now, from the perspective of the projects we are investing in, it is no longer a problem to collect money in many vertical industries. The next step is the issue of value-added services. "Wang Donghui said.
He said that if you simply use SaaS tools to charge, the imagination of future profits is limited. However, if you can cut into supply chain finance, procurement, logistics and other links through SaaS, and increase efficiency and create greater value through value-added services, the profit margin generated by this part is huge.
For example, the infinity was originally a SaaS platform for the underlying online ticketing system, which now covers more than a thousand cinemas. While doing SaaS software, it is also helping cinemas to do virtual applications and hosting, doing optimisation and advertising services to achieve a diversified revenue stream.
Although the SaaS project is not like the 2C project, it will achieve a certain degree of viral outbreak growth. But Wang Donghui believes that the growth of the SaaS project is more stable and can be seen every month. And once a company uses a SaaS platform, it will not be easily replaced.
Vertical SaaS cut transaction is difficult
How to judge when screening SaaS projects? Chunwen Capital Investment Partner He Wen told reporters that Chunxiao Capital will pay attention to the cost of each customer and the life cycle value that the customer brings to the company. If the customer cost is lower than the customer's contribution to the company's revenue in the next 36 months, it means that the company's account can be counted, and the company's development will be benign.
Regarding the development status of SaaS companies, He Wen’s views are not so optimistic. “Many entrepreneurs are telling the story of SaaS trading, but today it seems that SaaS trading is not that easy.†He said, “I thought you used my software to manage purchasing and selling, I can take my things. Sell ​​it to you. But now, it’s not the same thing that software is used well and that my stuff can be sold to you competitively."
He said that in addition to the security and general-purpose fields in which SaaS itself can support its own businesses, most of the projects in the vertical industry that want to cut transactions are not successful. This may also be the reason why many SaaS projects have closed down this year, or there are fewer financings.
Among the SaaS projects invested by Chunxiao Capital, there are also projects that are not ideally developed due to unsuccessful transactions. But some projects have developed well, such as the general-purpose SaaS platform convertlab for data marketing.
“We are still paying attention to the SaaS project, but we will be very cautious about investing in the SaaS project in the vertical field. I hope that the project will not simply be a tool from the beginning, but will be directly linked to the transaction. It can pass The SaaS approach combines with other services to create greater control over the customer and cut into the supply chain.†He Wen said.
He believes that the future general-purpose SaaS company is more likely to succeed directly by means of tool charging. Vertical SaaS companies can hardly be an independent company if they are not well integrated with the transaction. These companies may be harvested by large companies, and as part of corporate services, industry mergers or acquisitions will come.
However, Wang Donghui is still confident about the prospects of the SaaS industry. He said that the US market analysis shows that almost 3 out of every 10 listed companies in the US technology field are in the enterprise-level service field based on information systems. There are many companies with billions and billions. The United States is the peak of SaaS enterprises around 2005. China has been behind the United States for more than a decade in enterprise informationization, and will ushered in the peak of SaaS enterprises in 2020.
"At present, among the more than 30 SaaS platforms we have invested in, there are already several valuations of several billion yuan. I believe that among the companies based on the SaaS model in China, there will be companies with a valuation of 10 billion or even 100 billion yuan in the future. "Wang Donghui said.
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