But European companies sell software that can be accessed online through subscription. This is the company that powers the startup ecosystem and usually makes the most money for investors.

Five years ago, who would have thought that one of Europe's top technology startups would become Romanian SaaS company UiPath? But we are gone, and after raising another $225 million this month, the company now has a market value of $10.2 billion.

Other companies that originally came from Europe include Veeam, Monday, DarkTrace, JFrog, Celonis, Collibra, Sisense, TalkDesk, and WalkMe. Although well-known, they are all unicorns worth $1 billion. Many companies are important competitors of American SaaS giants, such as Salesforce, Dropbox and Docusign.

The venture capital firm Accel has long been the dominant force in European SaaS investment, but now there are many others. From 2016 to 2019, the financing of European Saas companies increased from US$2 billion to US$5 billion, a growth rate much higher than the US$15 billion to US$20 billion.

What now? On the surface, the coronavirus crisis is a boon for SaaS startups, because large companies are accelerating their pace of digitalization. During the lock-in period, the valuations of SaaS listed companies such as Zoom and Twilio have risen.

However, there are also serious risks on the horizon. Will the slowdown lead to budget tightening and mid-term depletion of demand? Will the failure of many small businesses cause disasters for some people in this industry?

Accel’s leading SaaS investor Philippe Botteri wrote last week: “For the SaaS ecosystem, all traffic lights are green (fingers crossed!).” But is he right to be so optimistic?

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