NPLG 8.17.23: Cloud 100 & PLG

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Cloud 100 & PLG

Every year, Forbes publishes the Cloud 100, a list of the 100 most promising private cloud companies. The year’s list includes OpenAI, Databricks, Stripe, Canva and Miro. I saw an analysis of the list from Adam Schoenfeld, that I wanted to share with the NPLG community:

1. AI

   • If software ate the world, AI is eating software.

   • 28% of Cloud 100 talk about AI in their main headlines and company description.

   • 29% are actively hiring for AI, ML, and Data Science roles.

   • AI platforms & enablers like OpenAI, DeepL, Scale AI made the list, but we also see dozens of AI integrated products leading the Cloud 100 across categories. That includes AI Native companies like Grammarly or Gong and AI integrated products like Notion.

2. PLG

   • Product-led motions are well established in the Cloud 100.

   • 72% have a clear free plan or free trial.

   • It's not just Dev Tools and horizontal -- PLG is happening across every category with many examples in security, mar-tech, and HR Tech.

3. Transparent Pricing

   • SaaS leaders understand modern B2B buyers.

   • 48% have transparent pricing.

   • Some companies even trust buyers to see big numbers 😱. Pendo.io shows $40K/yr and gives transparent options for quarterly or annual billing. Klaviyo shows up to ~$2K/mo.

4. Community

   • Cloud 100 leaders are prioritizing community.

   • 60% have some sort of owned community for customers, users, or a community of practice.

   • Webflow and Zapier are examples of community-centric Cloud 100s leaders.

5. Partnerships/ecosystem/integrations

   • Multiple clues that suggest Cloud 100 are investing in their ecosystem.

   • 74% have a Partners page.

   • 53% have a public API.

   • 22% list multiple integrations.”

Additionally, I wanted to share a valuable resource with the NPLG community that my friend Dave Rigotti has been working on: the Ultimate Product-led Go-To-Market (PLGTM) Vendor Buying Guide. Check it out!

I would love feedback. Please hit me up on twitter @zacharydewitt or email me at zach@wing.vc. If you were forwarded this email and are interested in getting a weekly update on the best PLG companies, please join our growing community by subscribing.

PLG Benchmarking (Startups):

I will continue to update these metrics and add new metrics. I would love your feedback on what else I should track (zach@wing.vc).

Organic Traffic (as % of all website traffic):

• Great: 70%

• Good: 50%

Conversion rate (website → free user):

• Great: 10%

• Good: 5%

Activation rate (free user → activated user):

• Great: 50%

• Good: 30%

Paid conversion rate (free user → paid user):

• Great: 10%

• Good: 5%

Enterprise conversion rate (free user → enterprise plan):

• Great: 4%

• Good: 2%

3-month user retention (% of all users still using product after 3 months):

• Great: 30%

• Good: 15%

Conversion from waitlist to free user:

• <1 month on waitlist: ~50%

• >3 months on waitlist: 20%

For more detail on acqusition rates by channel (Organic, SEM, Social etc), please refer to this prior NPLG.

PLG Financial Benchmarking (Public PLG Companies):

Financial data as of previous business day market close.

Best-in-Class PLG Benchmarking:

15 Highest PLG EV / NTM Multiples:

15 Biggest PLG Stock Gainers (1 month):

Complete Notorious PLG Dataset (click to zoom):

Note: TTM = Trailing Twelve Months; NTM = Next Twelve Months. Rule of 40 = TTM Revenue Growth % + FCF Margin %. GM-Adjusted CAC Payback = Change in Quarterly Revenue / (Gross Margin % * Prior Quarter Sales & Marketing Expense) * 12. Recent IPOs will have temporary “N/A”s as Wall Street Research has to wait to initiate converge.

Recent PLG Financings (Private Companies):

Seed:

• AskEdith, a developer of a data analytics platform designed to resolve business problems, has raised $4.28M at a $12.28M valuation. The round was funded by Abstraction Capital.

• Dropzone AI, a developer of an artificial intelligence platform intended to deliver pre-trained autonomous artificial intelligence security agents that work alongside human analysts on security operations teams, has raised $3.5M. The round was led by Decibel Partners, with participation from PSL Ventures.

Series A:

• MindsDB, a developer of predictive tools designed to help organizations apply machine learning to their data, has raised $46.5M. The round was led by Benchmark, Mayfield Fund and nVentures, with participation from OpenOcean VC, NVIDIA, Walden Catalyst, TQ Ventures and Y Combinator.

• Rootly, an operator of an incident management platform intended to help companies resolve incidents faster by automating manual admin tasks, has raised $12M. The round was led by Renegade Partners, with participation from XYZ Venture Capital and Gradient Ventures.

Series B:

• DNSFilter, a cloud-based filtering and threat protection platform intended to block inappropriate content or prevent malware on any network, has raised $25.76M. The round was funded by Insight Partners and Arthur Ventures.

• Osano, a cloud-based data privacy software designed to help companies become compliant with the data privacy laws of different countries, has raised $25M. The round was led by Baird Capital with participation from Jump Capital, LiveOak, NextCoast and TDF.

Series C:

• Horizon3, a startup providing a platform designed to improve the effectiveness of organizations’ cybersecurity solutions, has raised $40M at a $308M valuation. The round was led by Craft Ventures, with participation from Signal Fire.

Later Stage:

• Weights & Biases, an AI and ML development platform, has raised $50M at a $1.25B valuation. Friedman and Gross, alongside existing investors Coatue, Insight Partners, Felicis, Bond, BloombergBeta and Sapphire participated.