The Year of Efficiency in Cloud

The 2023 Cloud 100 list of the world’s best private cloud computing companies has just been published  by Forbes & Bessemer.

The top highlight was: 2023 became the year of efficiency in cloud, and profitable growth became more valuable than growth-at-all-costs.

Indeed, nearly 1/4 of Cloud 100 members are already cash flow positive today, and nearly 2/3 of the 2023 Cloud 100 will be cash flow breakeven or profitable by the end of 2024.

Because of the effort for efficiency (reduced S&M expenses), the average Cloud 100 company is forecasting a 55% yoy growth in 2023, while in 2022 the average growth was 100%. Nevertheless, a 55% annual growth is still pretty solid (the top quartile should be growing over 70%).

Moreover, the average Cloud 100 ARR multiple has decreased, from 30x in 2022 to 26x, which is still high when compared with the current 9-10x of the public markets comparables – part of this difference is because there were fewer funding rounds.

The Cloud 100 honorees are also getting bigger; about 95% of them should become a Centaur (>$100M of ARR) by the end of the year.

Finally, almost every Cloud 100 startup has openly embraced integrating AI into their product capabilities, supporting the thesis of the dawn of an AI supercycle. “Our 2023 Cloud 100 applicants have never been stronger – proof that AI is the next horizon of cloud”.

Conclusion

Seven of Fabrica Ventures Fund I portfolio companies made the 2023 Cloud 100 list:

#9 Rubrik, #12 Netskope, #13 Tanium, #16 Carta, #22 Checkr, #49 Druva, #68 Automattic

These startups are remarkable, and we are thrilled to take part in their journey.