Europe’s Tech Startups Will Thrive During Slowdown, Accel Says

Technology startups are advancing in Europe even as economies slow amid a debt crisis that’s threatening credit ratings and governments in the region, Accel Partners Principal Philippe Botteri said.

Companies innovating in mobile technology, mobile commerce and cloud computing, which enables software and data to be hosted remotely, are growing quickly despite stagnating national economies and Accel hasn’t noticed any slowdown in these fields, Botteri said in an interview in Paris. The global market for cloud services may grow to $148.8 billion in 2014 from $68.3 billion last year, according to researcher Gartner Inc.

“There are plenty of great opportunities to invest in Europe at this point and we have plenty of capital to do so,” Botteri said. “Whatever happens in the macro economy is not something that’s going to fundamentally change the trends that are supporting these companies.”

Accel manages funds of about $9 billion and is among the investors in Facebook Inc. and Groupon. The Palo Alto, California-based company’s investments range from a few hundred thousand dollars for a business that’s just getting started to tens of millions of dollars for a more established operation, Botteri said.

“2011 has been a very good year for the portfolio so far,” Botteri said. “We haven’t seen any softness happening at this point. But again we are talking about a specific part of the economy, which is the startup ecosystem, the high-growth ecosystem.”

Cloud Acquisitions

The growth in cloud services that allow companies to charge for access to applications online has led to a number of initial public offerings and acquisitions in recent months.

Jive Software Inc., a provider of cloud software that lets employees collaborate or interact with customers, said last week it aims to raise as much as $117 million in an IPO that would value it at as much as $573 million.

At least three other U.S. companies that sell software as a service have registered for IPOs since August. ExactTarget Inc., a provider of e-mail marketing services, filed in November, three months after rival Eloqua Ltd. Bazaarvoice Inc., whose software helps companies communicate with their customers, announced IPO plans in August.

SAP AG, the largest maker of business-management software, announced a $3.4 billion deal on Dec. 3 to buy SuccessFactors Inc., which offers cloud software to manage employee performance. Oracle Corp. (ORCL) the world’s second-largest software maker, this year agreed to buy RightNow Technologies Inc., a provider of cloud-based customer-relationship software, for $1.5 billion.

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To contact the editor responsible for this story: Kenneth Wong at

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