Billion-dollar B2B: Cloud-first enterprise tech behemoths have massive potential

Billion-dollar B2B: Cloud-first enterprise tech behemoths have massive potential

More than half a decade ago, Neeraj Agrawal, a partner in my battery venture, wrote a widely read post hoping to reach $100 million in annual recurring earnings for enterprise-software firms. His playbook dubbed “Play-Hat 3” for “Triple, Triple, Double, Double, Double, Double” refers to a software company’s revenue growth phase – many high-growth startups contribute to their growth index.

It also highlighted the broad explosion of industrial value creation, ranging from the transformation of cloud on-premises software. Fast forward to today, and the insights of T2D3 are still relevant. Now is the time to update T2D3 to account for some of the tectonic changes that are making up the vast universe of B2B technology – and pressuring companies to grow at a rate we have never seen before.

I call this new paradigm the “billion dollar B2B”. This points to the strengths of a new class of cloud-first, enterprise-tech behemoths that have the potential to reach $1 billion in ARR – and a market capitalization of $50 million or even more than $100 billion. I call this new paradigm the “billion dollar B2B”. This points to the strengths of a new class of cloud-first, enterprise-tech behemoths that have the potential to reach $1 billion in ARR – and a market capitalization of $50 million or even more than $100 billion. Over the past several years, we have seen a leading team of B2B standouts – Twilio, Shopify, Atlassian, Okta, Coupa*, MongoDB and Zscaler, for example – exceeding the $1 billion mark or increasing their market capitalization by 10%. 

Recently, iconic companies like data giant Snowflake and video-conferencing core Zoom came out of the IPO gate with even higher ratings. Revenue in 2020 zoomed in at just under $883 million, now close to $100 billion per KPQ data. The wings include other B2B super-unicorns such as Databricks* and UiPath, each of which has raised more than $20 billion in private financing rounds per report, unprecedented in the software industry.

The wings include other B2B super-unicorns such as Databricks* and UiPath, each of which has raised more than $20 billion in private financing rounds per report, unprecedented in the software industry.

Share This Post