The pandemic isn’t over, but the light is at the end of the tunnel. During this great reset — when the way people work and live is more fluid than ever before — figuring out how to navigate the digital and the “real” world seems to be on everyone’s mind. For many leaders, this shift is an opportunity to explore what they can do differently as the world begins to open up again.

To help explore this transition, we bring together three leaders from industries undergoing major change who are leaning into the shifting landscapes and pointing their respective industries towards the future. Reese Witherspoon, Rachel Carlson of Guild Education, and Chris Comparato of Toast share the transformations they’ve made this year, the values they continue to carry, and how that informs the way they build and lead.

Speakers

Reese Witherspoon, Founder of Hello Sunshine, Chris Comparato, CEO of Toast, and Rachel Carlson, CEO of Guild

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Transcript

Reese Witherspoon: Hi, I’m Reese Witherspoon and I’m the founder of Hello Sunshine.

Rachel Carlson: Hi, I’m Rachel Carlson and I’m the CEO of Guild.

Chris Comparato: Hi, I am Chris Comparato and I am the CEO of Toast.

Rachel Carlson: All three of us spend time in big industries in the US that have really undergone an enormous amount of change over the course of the pandemic in the last almost year and a half now. So I’m curious as you think about the broader change, but more specifically change as leaders and how you figured out how to lead during this crazy period that we’ve all gone through. What are the leadership changes you’ve made or any leadership resolutions that have been impactful for you as you’ve navigated leading? And I’ll ask Chris to start.

Chris Comparato: Toast is a cloud-based end-to-end platform that powers the restaurant industry. So as a backdrop, the COVID pandemic had a pretty significant impact and it threw a punch into the restaurant community. And when the restaurant community started to feel pain, we felt pain. When your whole customer base is suffering, you feel that pain. If you go back to last March and April, it was pretty tough. And while you’re reading signals from different sources, you’ve got to make some calls. So for me, one of the biggest self-improvements is really about decision-making. And then on top of that, how do you communicate when you’re in a little bit of a crisis and you’re analyzing where to go next, how do you communicate to your team, how do you communicate to the customer base, and all of the key stakeholders?

So I think that’s one thing that jumps out at me is really decisiveness and resilience, and then also communication because it’s important to stay aligned and give people clarity. But it’s continuous improvement. So. I think I’m always looking to up my game and continuously improve and that part continues. Reese, how about you? The media industry, the media industry has gone through amazing transformation in the past year and a half. So when you look to your role as a leader, can you reflect on any changes that you had to make within your space and your industry?

Reese Witherspoon: Yeah, I think March, I want to say the 11th, we were in the middle of shooting The Morning Show in downtown Los Angeles and everything just came to an abrupt halt. I remember Jennifer Aniston calling me and saying, we have to shut this down. Do you see what’s going on in Italy? And within 24 hours, we were on the phone with the heads at Apple and just saying, we got to shut this show down. At Hello Sunshine, we had four shows in production that just immediately stopped. And it was very abrupt. We were all told we were going back in two weeks. It was not two weeks. And that’s hard. Once you’ve started production, it’s a speeding train forward where you lose so much money every single day. And I have to say that our corporate partners, our studio partners were incredible with the way they took care of our workers, really compensating them, making sure that they were still paid for as long as they could be. But I would echo what you said, Chris. It was a lot about learning to communicate with people. It was, wow, we all got on Zoom really fast and started connecting and reassuring. And not just those everyday scheduled meetings, but it was picking up the phone and calling people and going, how are you managing this because we’re now talking all day on screens and how are you handling that with your team. And mental health check-ins. Right? And Zoom-free Fridays became really important as the pandemic progressed. Come back in October, we were back to production again, and that was a great relief to us, but then we had to implement tons of COVID protocols. So it’s been a really hectic, crazy time, but I feel really optimistic that those skills that we learned during that time are really going to help us grow and feel even closer as a company. What about you, Rachel?

Rachel Carlson: For us at Guild, we are focused on up-skilling all of America’s workforce, but with a real focus on the frontline workforce. And the frontline really was undergoing, I think the most intense impacts of COVID. When you think about employees who work at a Walmart or a hospital or in a Chipotle and had to move to all app-based orders, you name it, those are our students. And so empathy became really the driving characteristic that we had to focus on at Guild because of course, we’re deeply empathetic to our students. And at times that felt at odds with some of the other stakeholders, we serve like our employers or our university partners who all come together to do this up-skilling. But really everyone was struggling because employers were trying to figure out how do we keep our people safe, but keep our stores open. And then universities had an incredibly difficult time during the pandemic, particularly the schools we work with that have both on-campus footprints and online. So empathy became the driving theme for Guild. And then for me, as a leader, it became wildly important. 54% of our students are women. 70% of Guild employees are women. This was a tough year for moms. And 56% of our students are students of color. And this was probably the most important, but the most difficult year of conversations, decisions around race. And for me, just trying to constantly find a way to connect and stay aware of what my team and my customers were going through, became my north star. And it was hard. And I’ve learned so much. I look back with a lot of gratitude for what I learned this year.

Reese Witherspoon: So, Chris, speaking of your business, so many brick and mortar locations of restaurants had to pivot to digital solutions. Where did Toast jump in and help with those solutions for restaurant owners?

Chris Comparato: Sure. So before jumping into, really, 2020, I think it’s important to zoom out and talk about the industry at large. And the restaurant industry is this amazing diverse industry that we all love and cherish so much, but it’s been underserved by technology firms and financial service firms for decades. It’s fallen behind other industries in modernizing around technology. When COVID hit, I’d argue that some of the products which used to be optional became indispensable and must-have. So if you think about the restaurant which typically served their dine-in population, and maybe they had delivery, or maybe they had takeout or online ordering, all of a sudden when COVID hits, people are not coming into the restaurant, obviously, and restaurants really had to pivot. And how do you drive those orders into the door? So whether it’s first-party delivery to get orders in on delivery, whether it’s curbside pickup and take out, whether it’s online ordering. So at Toast, we very much tried to expedite products that we already had in motion, but really turbocharge them and get them into the hands of restaurants so that restaurants could get orders in the door. And then once the restaurant had consumers and guests’ orders, how do you increase efficiency, because these restaurants were struggling when it comes to staffing and employment and safety protocols and compliance. So how do you enable that restaurant to really run efficiently and run a streamlined business and get those meals and orders out the door, whether it’s to frontline workers or to consumers?

And then lastly, how do you do all of this and still delight your guests and make sure that as an entrepreneur and as a creator and an artist, you’re still making these fantastic meals, but you’re delivering them through different channels. And how do you still make sure that you’ve got this edge on delighting your guests and creating a fantastic experience? So if the three of us were sitting on my patio, how do we enjoy a great meal, but we’re on my patio, or maybe we’re doing takeout and going to go in and do curbside pickup and sit at a park. But how do you make sure that you’re also delighting the guest? And I think a lot of this came front and center, I’d say, in the middle of 2020. And we had to expedite products that we had already been working on. Another good example is the ability to, when restaurants came back, for us to walk into a restaurant and order and pay at the table, but perhaps, not touching a menu, not touching a terminal, but the ability to have the health and safety of the consumer and the employee in mind. So products like order and pay at the table and scan-and-pay became really critical indispensable products for the restaurant industry.

But Reese, what about media? Media has gone through an amazing transformation. So maybe you can comment on some of that same transformation that’s happened within media.

Reese Witherspoon: Yeah. I mean, it’s been really interesting to watch audiences shift their viewing patterns. So watching that behavior change so rapidly, unfortunately, the decline of a movie-going definitely impacted my business greatly. We were primarily a streaming-based company that are scripted and unscripted pretty much lives on streaming. So, just doubling down on those strategies. And also thinking about, kind of trying to predict what the future will be, what do people want to see? I think it’s going to be really important as we emerge from this time that people are going to want to see hope and optimism, humor, comedies, things that lift you up. It was also really hard too because a lot of shows came out and they were very, very hard and dark. It was hard to watch. So I think a pivot there too, about what we’re making, not just how we’re making it but the content inside, how audiences are going to want to feel cheerful. And that’s something that we were really talking about a lot and incubating new ideas and finding new scripts during this kind of time of quiet.

Rachel Carlson: Reese, I’m really curious. Your career has spanned so many different industries and you’ve been quite entrepreneurial in a number of them between the work in media and Draper James and the Book Club. I’d love to hear, what inspires your entrepreneurship?

Reese Witherspoon: Well, I just have a billion ideas and I like to…Sometimes they’re terrible ideas and then sometimes they’re good ideas. But I’ve always been entrepreneurial ever since I was little. I always had some business I was running out of my desk in the third grade or doing something enterprising when I was seven or… So. I don’t know. I’ve always thought of myself as a problem solver. So when I see a very clear glaring problem, I’m always trying to figure out my way to fix it. And when I looked at Hollywood in general and media in general, I started to see that women as audiences were migrating to different platforms, but they weren’t really being spoken to on those platforms. Right? So my industry was pretty much focused on movie-going. And with the emergence of streaming, created this real white space and social media, I would say, where women were very early adopters. I think it created an opportunity to build a multimedia brand that could really bring entertainment to women where they were, whether it was on their phone, whether it was on the TV, whether it was on their computer screen, but instead of asking audiences and consumers to come to us, we were going to them. And that was why we were very consumer forward. And trying to just always keep on top of what women are looking at right now, and in the process doing it with authentic authorship across all marginalized voices. It isn’t just about women per se, but it’s about women of color, LGBTQ representation, differently-abled women. These stories have not been told for years and years, hundreds, thousands of years, because the creators couldn’t authentically tell those stories.

But we’re in a unique spot where the convergence of streaming and the secular tailwinds of me too, or time’s up or black lives matter, has really brought consciousness to audiences and companies alike. So I think, whereas I used to be talking in an echo chamber 10 years ago about these things, now studio heads are like, yes, bring us all that content. We need it. So it’s actually been a really encouraging time for a change in my industry. This kind of dovetails with what I was talking about. There have been major resets in so many industries. And I wonder how you have perceived that and been in front of all of this progress and how you kind of chart that with your business.

Rachel Carlson: So for Guild, we, in 2014, felt like the future of work was coming and the need to upskill America’s workforce was prescient in a way it hadn’t been for any other generation. Because if you think about it, the grandfather was maybe a member of an agricultural economy. The son, who was then in the industrial economy, saved money for college. College was quite affordable then. And the grandson moved into the knowledge economy. That’s how we used to make the change over generations. Now it’s the great-granddaughter and she’s going to have to re-skill herself every five years. She can’t wait for her children to enter the next economy or to learn the next skill because the half-life of a skill is no longer a generation in length, it’s four and a half years. And so what that means is for the average American they’re going to have to re-skill and up-skill themselves every five years. That doesn’t mean a four-year degree every five years, but it does mean three, six months, sometimes one to two years of learning a new technology or a new set of people leadership skills or elevating themselves into the next step of their career.

So we had a pretty deep conviction on that seven, eight years ago, but it took a long time to convince organizations to follow. So we had to find the more innovative companies and the more innovative universities to build this two-sided marketplace who were willing to take a risk. And some of those are companies and schools you’ve heard of like the Walmarts and Chipotles and the University of Arizona, but others are ones you’ve never heard of, that were just on the tip of the spear, where they had leaders. And it always comes down to leaders who see what’s needed the same way you mentioned knowing what women need from media. And I’m a happy, grateful customer of that from your behalf. So thank you for your book club and for Draper James and that type of innovation. I think it’s about understanding what the mass American public needs. And that’s something I like about the work that all of us do, none of us call Silicon Valley home, but we are doing innovative things that live in streaming, on the internet, but from what I would call mainstream American perspectives.

Reese Witherspoon: I love hearing that Rachel. It’s so interesting because I’ve never really thought about every skill that you have. Right? Because we all have skill stacking in our careers. But it’s so important to stay nimble and continue to learn, every four years, new skills. For us, it’s about all the new social media platforms. And it’s like, sometimes I’ll have a moment where I think, another platform and we have to learn it. And the answer’s yes, we do. We have to adapt and innovate at all times if we’re going to stay current and part of the creative economy. So I think that’s really interesting that you say that. But I’ve never heard anybody sort of talk about it as every industry needs that kind of constant updating and learning.

Chris Comparato: Yeah. One of the things I was going to mention is Rachel, I applaud you because you’re making it so accessible to everybody. And I guess a question for you is, how do you think remote learning long-term will have an impact on how we all learn? And can you comment on remote learning and sort of the virtual environment and what that’s going to look like long-term?

Rachel Carlson: Yeah. So I like to think about it from an entrepreneurial framework of what’s the job to be done. And y’all might’ve heard that theory before, but I think we sometimes forget school is a lot of things. So the job to be done for school looks very different depending on your age. The job to be done for kindergarten through sixth grade is often social, emotional learning. The job for middle and high school is often more social than books. Even though we talk about the SAT scores, you’re really becoming a human, you’re finding yourself through adolescence. The job to be done for 18 to 22-year-olds going to the classic college experience, that’s a coming of age experience, right, with the football games and the experience you might have on campus. But the job to be done for the average American learner, who today is a 32-year-old single mom, probably a woman of color, probably working a job between 14 and $20 an hour, she’s actually the new normal student. And what she needs is needs skills. She’s hiring a college or hiring a school for skills acquisition. And so she doesn’t care about the football games and she doesn’t care about the campus. And that doesn’t mean the campus isn’t important. It’s wildly important to that 18 to 22-year-old, but today only 27% of students have ever slept in a dorm. And that number is declining. And so when we talk about the other 73% of learners, they’re hiring college for something else. So that’s my take on remote learning is for those who are hiring school for the social, emotional coming of age experience, we need to preserve the classroom, the campus, et cetera. For those who are hiring it for skills acquisition, remote learning’s an awesome tool.

Reese Witherspoon: I could talk about that all day, Rachel, because my kids are applying for college. One daughter’s in college. Another one is applying to college and this crush in New York and Los Angeles and maybe other metropolitan areas, that this academic stress has on the children, I think is so misplaced because it’s so much about social, emotional learning that I value most in my employees. My most valuable employees are ones that have social, emotional intelligence. The ability to work well with others, are great team members, and pivot quickly, and find solutions. So when I see all this crush by the SATs and studying for the honors and the APs, and I think have we lost the importance of soft skills and social learning? So I do think that pivot within remote learning so that you get what you need out of it. Right? But to really nurture that artistic and social side of yourself is important. Anyway, I could talk about that all day.

Rachel Carlson: I love that. That’s a perfect pivot to the last question because the question I was going to ask is about waving a magic wand. If you could make one change in your industry. Because for me, it’s what you were just hitting on Reese. We call it durable skills. How do we turn the conversation away from skills that expire, which are often the ones computers can do as well? Right? The computer is going to be able to do great on the SATs, but what are the durable, soft power skills that we need all Americans to have so that we can have a nimble economy that can survive the next big pivot, which I hope isn’t a pandemic, but is some other industrial change we haven’t seen yet. So, that’s my wish. I’d love to hear Chris, what would be your magic wand you could wave for your industry?

Chris Comparato: Yeah. So as I mentioned, it’s an industry that’s been underserved. And if you are a minority entrepreneur or a black entrepreneur, and let’s say you want to start a restaurant, the odds are even more stacked against you. So if I were to wave a magic wand, I’d say, what can we do to help the artists, the entrepreneur who’s underrepresented? Maybe they can’t secure capital. Maybe they can’t secure the right technology tools to be successful. Maybe they can’t secure the right education and the skills training and the consulting around running a P and L and running a restaurant. So I think it’s important to focus on that because especially given the past year and a half, the impact to these communities and especially restaurant entrepreneurs who have been underprivileged, what can we do to change that? And I think we have an opportunity ahead of us to create systemic changes to help any entrepreneur, no matter what your background is to start a restaurant and run a great business. And I think that’s an important magic wand. And I think many people are leaning into it, whether it’s banks that are sponsoring entrepreneurs of color funds, we are leaning into it with pilot projects in Boston to help minority restaurants try to be successful. But I think we’re going to learn a lot. And back to this educational journey, I think we’re on an educational journey to help everybody be successful, especially when the odds are stacked against you. And I think that’s going to be an important piece of the puzzle moving forward. Reese, how about you? If you had a magic wand, what would you do with it?

Reese Witherspoon: You know what, it’s such a great question because I think a lot about it, and I’ve thought about this a lot about how artists get paid. And I think that is revolutionizing right now. Whether you look at the emergence of NFTs and the ability to have direct payment from the artist to the buyer and have this continued connection, that’s something really encouraging and I hope to see more of because growing up in this business, I’ve been in Hollywood and media for over 30 years. Oh God, I can’t believe I just said that. But what always gnaws at me is how artists are not directly paid for their work and have no ownership over their work. So as more work is done to connect the financial economy with artists, and we’re cutting out the middle distribution piece, I think we’re seeing more money and financial stability go to the actual creators. And I find that enormously encouraging. So if anything, I would love to wave a magic wand and make that happen even faster. Thank you so much for this great conversation. I really enjoyed this time. I could talk all day to you guys, but we’re going to wrap up now.

Chris Comparato: Thank you both. This was exciting. I think just within this time I learned a lot. Rachel, we should be partnering on education. And Reece, maybe there’s a way to partner within media. But I really enjoyed this.

Rachel Carlson: Reese, Chris, thanks so much for an awesome conversation. Excited to figure out how to partner more with both of you.

Alex Kayyal, Managing Partner at Salesforce Ventures, Byron Deeter, Partner at Bessemer Venture Partners, and Elliott Robinson, Partner at Bessemer Venture Partners discuss the high bar companies had to reach to make this year’s list, the latest on the cloud economy, and the trends they expect to see over the next year.

Speakers

Alex Kayyal, Managing Partner at Salesforce Ventures, Byron Deeter, Partner at Bessemer Venture Partners, and Elliott Robinson, Partner at Bessemer Venture Partners

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Transcript

Alex Kayyal: Hello, everyone. Thank you so much for joining us for the sixth annual Cloud 100. My name is Alex Kayyal, managing partner at Salesforce Ventures, and we’re so excited to have you here today as we celebrate 2021’s Cloud 100. Over the past 18 months, we’ve experienced one of the most challenging periods in recent memory, but also one that has seen unprecedented innovation.

Elliott Robinson: And I’m Elliott Robinson, partner at Bessemer Venture Partners. This is indeed been a banner year across the entire venture capital and startup ecosystem. In the first half of 2021 alone, VCs from around the world have invested a total of $288 billion, which is an all-time record for our industry. Entrepreneurship is gaining momentum around the globe, as more than half of the venture capital dollars raised went to startups based outside of the United States. Powered by cloud technology itself, we’re seeing generational shifts in both established and emerging markets when it comes to opportunities for cross-border collaboration, communication, and the ability to scale world-class remote teams from just about anywhere. But today, we’re all here to celebrate a unique subset of the venture-backed community, the top 100 privately held cloud companies.

Alex Kayyal: With two of the largest cloud portfolios, Salesforce Ventures and Bessemer Venture Partners have partnered with Forbes, the top publication in venture capital. Together, we recognize the leaders in businesses shaping the future of the cloud economy. The global pandemic has changed the way the world works, and we’re not going back to the way things were. Customer and employee expectations have changed, and companies have digitally transformed at a faster pace than ever before. For many founders all over the world, these challenging times have brought a renewed sense of purpose, which we’ve been so grateful to be a part of.

Times of adversity are often the greatest moments of transformation and opportunity. Many of the changes that were instigated by the pandemic are becoming permanent societal norms. We’ve seen a shift to remote and hybrid work, an increased focus on automation, personalization and convenience, and entrepreneurship is on the rise. This is the new normal, and we’re so excited for the role that the cloud ecosystem will play in driving that transformation.

Elliott Robinson: All of you watching today, the people that are leading, building, and fueling the cloud economy are the real trendsetters in the new future of work. And your collective efforts, you are the ones that define best in class culture and the never-ending innovation that helps industries thrive. The tech sector continues to drive value and wealth creation in the broader global economy. And the cloud represents a source of economic opportunity across almost every industry you can think of. Since January, Cloud 100 companies grew their employee ranks by a net average of 26%. That translates to a total of more than 17,000 new hires. And it’s probably no surprise to learn that after the FinTech sector raised a record $33.7 billion from venture capitalists in Q2 alone, FinTech companies on the Cloud 100 list also created the greatest number of new jobs this year to date.

Alex Kayyal: Compared to 2020, U.S. workers are feeling more confident than ever to try for new opportunities. Economists say this signals a healthy labor market, as people gravitate to jobs more suited to their skills, interests, and personal lives. And as employees seek values-driven, supportive, and flexible organizations, great leaders are responding in kind.

For example, Guild Education, co-founded by CEO Rachel Carlson, recently opened a daycare center for their employees. By better catering to working parents, Guild has maintained a 96% retention rate amongst parents during the pandemic and set an example for great leadership. In today’s environment, being values-driven and values-led matters more than ever.

Elliott Robinson: 80% percent of workers also say they want business leaders to speak up on social and political issues, and think companies can do more when it comes to diversity, equity, and inclusion. But it’s not about furthering diversity theater or promoting empty pledges in public statements. It’s about turning your values into tangible, measurable actions that drive exponential impact and generate superior business outcomes.

All of this is exemplified through the culture and products that you build, how you treat your customers and employees, and ultimately who you empower to be the leaders within your organization. Plus, as the cloud economy taps further into talent pools from all over the globe, companies need to rethink and retool their human resources technology stack. For example, companies like Papaya Global help businesses navigate the complexity of a rapidly evolving remote workforce to more effectively manage international taxes, payroll, and benefits across one unified platform.

Alex Kayyal: How we work has undergone a paradigm shift and businesses of all shapes and sizes are re-imagining the tools that are needed to ensure the work from anywhere in the world is a sustainable, long-lasting solution. That could be driving additional team collaboration with solutions such as Miro and Loom, securing remote devices with Tanium, or leveraging tools that enable better sales and service such as Gong, Outreach, and Highspot.

And thanks to the rise of low-code and no-code solutions, our capacity at work continues to expand. Anyone can collaborate on building beautiful designs with Canva and Figma, and in a few clicks, Zapier, Workato, and Monday.com can turn routines into automated processes, helping people do their jobs more efficiently.

Elliott Robinson: We also saw the promise of the work from anywhere movement come to life, as vertical software giants such as Procore, ServiceTitan, and Toast demonstrate that the power of the cloud is not only found in what we think of as the more traditional enterprise software environments, but also for all professionals, from construction to plumbing, landscaping restaurants, and beyond. When we compare this year’s Cloud 100 list to previous years, we’ve never seen so much dramatic change. Companies from the Cloud 100 continue to achieve fantastic success via both large acquisitions and record-breaking IPOs. As you may recall, Snowflake, which earned the number one spot in the 2020 Cloud 100 rankings, went public just moments after Forbes revealed the list, making it not only the largest cloud IPO in history but the largest IPO in the entire history of software. And since last year’s event, we’ve seen more than 19 Cloud 100 honorees also graduate from this prestigious list, including companies such as UiPath, Confluent, Procore, Auth0, DigitalOcean, Gainsight, and many more.

Alex Kayyal: And speaking of publicly traded cloud companies, top CEOs who grew this market into what it is today served as judges and helped us determine this year’s list. Thank you to the many cloud giants and leaders who have given their time and support to participate as their 2021 judges. And of course, we want to recognize the generosity and support of our event partners for helping us bring these amazing speakers to you at home today.

So on behalf of Salesforce Ventures, Forbes, and Bessemer Venture Partners, I’d like to give a big thanks to our sponsors. We really couldn’t run this event without you. Now, over to you, Byron, for an industry update.

Byron Deeter: This time last year, we saw historic rates of digital transformation as companies rapidly transitioned to the cloud as a necessity. After all, it’s even harder to work with legacy on-premise software if no one’s on-premise. But we continue to see these trends and they further accelerate. Because one thing is clear: Cloud is not a fad, it’s a business imperative. Your employees and customers demand it, and increasingly, the cloud is a necessity to survive and to compete in our digital ecosystem.

Even further accelerated by the global pandemic, our digital economy is going through this historic period of re-platforming. Cloud continues to be the growth driver of the tech economy, and it’s no coincidence that the companies with the largest market caps in the world, Microsoft to Amazon, Google Alphabet, and even Alibaba are not only worldwide tech giants, but they have multi-billion dollar cloud business units within them.

Now, for years, investors have talked about the FAANG stocks, the internet revolution with the emergence of Facebook, Apple, Amazon, Netflix, and Google as the flag bearers of the new economy. But as the trends of the internet and mobile mature, there’s a changing of the guard underway. At Bessemer Venture Partners, we coined a new basket of high-performing stocks called MT SAAS, consisting of Microsoft, Twilio, Salesforce, Amazon, Adobe, and Shopify. Last year, MT SAAS outperformed FAANG by over 100%. What MT SAAS illustrates is the power of the cloud and how it will continue to drive technology and innovation forward. Simply put, cloud computing is increasingly consuming software, hardware, and services, and it is, therefore, the most exciting mega-trend in technology, making it one of the most compelling themes impacting global GDP over these coming years. Last year at Cloud 100, we made two predictions. First, we predicted that the public cloud markets would surpass $2 trillion in total market capitalization. Well, we’ve blown through that number. Over the past months, the total market cap of public cloud companies has added another $1.3 trillion of market cap on top of the already impressive $1 trillion, hitting $2.3 trillion in total market cap, and growing 130% over that time. The public cloud markets have never grown this fast in all of our cloud index history. Our second prediction had to do evaluations. In 2020, 87% of the Cloud 100 was already made up of unicorns. Well, we’re excited to announce that in 2021, we’ve crossed another milestone. Every single company on the Cloud 100 has a billion dollar plus valuation. We’ve even seen a few emerging decacorns continue to merge onto this list. This community continues to astound us. When we created the first list six years ago, this milestone seemed inconceivable. And yet today, we’ve had to leave dozens of unicorns off the list because there are just too many in this amazing cloud community. Now, there are thousands of amazing cloud companies worthy of potential inclusion, and now over 150 of them are cloud unicorns. Yet our judges could only pick the 100. This compounding power of the cloud is a model and a thing to witness, especially considering that 15 years ago, there were zero public and private cloud unicorns on the index.

Private cloud valuations are getting bigger and bigger as the market’s appetite for the cloud continues to grow. Over the past six years, the average Cloud 100 valuation has grown by a tremendous 5.2X from $1 billion in 2016 to $5.2 billion in 2021. And when we compare last year’s average cloud valuation, which stood at $2.7 billion, that number has doubled again over this time period. Together, the cumulative value of the Cloud 100 in 2021 totals an impressive $518 billion. Again, almost a complete doubling in just a year with a 94% increase.

As we reflect on how far the cloud economies have come and where it’s headed, it’s amazing to see that today’s Cloud 100, the definitive ranking of private cloud companies has a cumulative value worth more than what the public cloud markets in total that just a few years ago. So, for the investors and founders alike, building a cloud business today has never been more valuable and very different from just a few years ago. We’re seeing more and more of these exciting cloud businesses being built outside the traditional Silicon Valley zip codes.

Alex Kayyal: Indeed, cloud globalization is a macro trend and the pandemic has further accelerated this trend. As an example, in the first half of this year, venture funding to startups in Europe totaled an unprecedented $59 billion. Having been based in London and invested in companies across more than 20 countries across the globe, I’ve seen firsthand how innovation really has no boundaries. Companies such as Stripe and Intercom originating in Ireland, Contentful in Germany, Snyk in Israel, and Culture Amp in Australia have proven that the cloud ecosystem is thriving everywhere. We’re also seeing more companies take a remote-first approach to building their teams. Hopin is a great example. Initially based in the UK, the company now has over 600 employees across the world as they’ve catapulted onto the stage. And with technical talent all over the world, we continue to see mega giants rising out of Asia Pacific, India, and other international markets.

Elliott Robinson: Cloud globalization will continue to fuel innovative startups from all over the world. As Byron mentioned just a minute ago, the cloud will have a sizable impact on global GDP in the next few years, but the footprint of the private cloud market now rivals some of the world’s biggest economies. This year’s Cloud 100 companies have a greater cumulative total value than the individual gross domestic product of 87% of countries on the planet.

Byron Deeter: The cloud universe is expanding in terms of geography, as well as the industries that they serve. Cloud 100 honorees span more than 10 different sub-sectors, including vertical software and enterprise automation, collaboration, productivity, and several more. On the list this year, we’ve seen the most powerful growth in FinTech startups, totaling a cumulative $146 billion in total valuation addition, which makes it more than a quarter of the Cloud 100’s cumulative value.

In second place, data infrastructure businesses making up an impressive $63 billion. When we look at these two leading subcategories and how they’ve grown in cumulative valuation over the past three years alone, it reflects this market upward trajectory. Cloud 100 data infrastructure companies have grown 70%, and the FinTech companies have ballooned an impressive 461%.

As financial services infrastructure is being rebuilt and redesigned for this modern world, we’ve seen this similar transformation happen within the cloud data stack, as amazing startups like Databricks and Fivetran, DataRobot, BigID, and Firebolt are offering better and easier to use infrastructure for accessing, analyzing, and furthering, this use of data. The reason why cloud companies continue to grow in value is because they continue to deliver larger portions of the tech stack to their customers.

For example, vertical software and FinTech are increasingly converging, as leaders such as ServiceTitan, Procore, and Toast shift entire businesses into the cloud and they embed these FinTech solutions. Essentially vertical SaaS giants now process payments and payroll more efficiently and provide more capital and credit on better terms for their customers than many of the traditional banks themselves.

Alex Kayyal: In parallel, we’ve seen e-commerce penetration and payment volumes accelerate massively during the pandemic. In 2020, for example, we saw 10 years worth of growth in e-commerce penetration in a matter of only three months, as consumers shifted their behaviors online. This momentum has sustained this year. This has led to a new crop of companies that are embedding financial services and payments directly into their applications as software and FinTech come together. Interestingly, we’ve seen this impact come through in the B2B payment landscape as well, with companies like Airwallex, Melio, and Razorpay leading the way.

Byron Deeter: We believe that cloud will become a majority of all software very shortly and help us all reimagine entire industries, such as healthcare, automation, gaming, and entertainment. We continue to see how the cloud is forging infrastructure of tomorrow’s digital economy and driving innovation for the future generations. Congratulations!

Alex Kayyal: Congratulations!

Elliott Robinson: Congratulations!

Byron Deeter: Now onto what we’ve all been waiting for, 2021’s Cloud 100.

We believe this is just the beginning. We’re about to enter a new period of business creation we’re calling The Great Reimagining.

Over the past 18 months, the total market cap of publicly traded cloud companies has soared from $1 trillion to $2.3 trillion, representing the fastest growth in the history of the cloud. Private cloud company valuations have been on a similar trajectory: every company on the 2021 Cloud 100 list carries a valuation of at least $1 billion, with an average valuation of $5.2 billion. This represents 420% growth from 2016. The total value of the 2021 list is a staggering $518 billion — nearly double last year’s level.

In partnership with Forbes and Bessemer Venture Partners, we’re thrilled to celebrate the accomplishments of the companies on the 2021 Cloud 100. Salesforce Ventures is proud to have invested in 27 companies on this year’s list, including three of the top ten: Stripe, Databricks, and Plaid. We also celebrate Slack Fund companies Loom and Notion, bringing our combined total to 29 companies on this year’s list. Congratulations to all of this year’s honorees!

Business leaders around the world are questioning everything they thought they knew and using this new understanding to reshape their strategies for success going forward. Customers’ needs and habits are evolving. Employees’ roles, attitudes, and workplaces are shifting. So are cities, suburbs, and real estate. Manufacturing, logistics, and shipping. School, childcare, and parenting. Transportation and travel. Entertainment, restaurants, and events. Financial services and banking. It’s hard to think of a single industry or activity that isn’t undergoing a major transformation.

As the world changes around us, technology is making it possible for us to respond quickly and change along with it — an urgent need for those who want to come out of this period victorious. As we examine this year’s Cloud 100 we see that the companies who made the list succeeded by helping organizations become more agile and resilient and in some cases, by rewriting the old rules of business.

Here is our take on the key themes driving this year’s Cloud 100:

New Paradigm #1

As the cloud becomes global, Silicon Valley is becoming a construct

Not too long ago, venture capitalists on Sand Hill Road mused that they would not invest in any startup that was more than an hour’s drive away. But more and more technology companies are finding success in every corner of the globe.

After spending the last decade investing in tech companies across over 20 countries, I’ve witnessed this global acceleration firsthand. The data backs up this trend: venture funding to startups in Europe reached an unprecedented $59 billion and the share of VC funding dollars outside the US reached 52% in the first half of 2021. This year’s Cloud 100 included 38 honorees founded or based outside of the US, making this year’s list the most global group to date. Among them are BigID (Israel), Canva (Australia), Cloudinary (Israel), CultureAmp (Australia), Miro (Netherlands), OwnBackup (Israel), and Talkdesk (Portugal). For the first time ever, two Chinese companies also made the list: Fanruan and Jushuitan.

Why now? Unlike localized consumer businesses such as, say, food delivery, the cloud knows no borders. It’s just as easy to deliver cloud solutions to a customer next door as it is to deliver to a customer a continent away. Enterprises around the world have relatively similar needs and problems, and entrepreneurs from Australia to the UK have discovered that the usefulness of their products easily translates.

Moreover, companies have found large, diverse talent pools of engineers across multiple regions in the world, often starting with where the startup was founded. This has led to development hubs, as well as distributed teams that are remote. Virtual event startup Hopin, for example, was founded just two years ago in the UK; the company now has 800 employees around the globe that are remote-first. Importantly, companies outside Silicon Valley have seen stronger retention rates for top technical talent.

As many of these early cloud companies outside the Valley proved success, including Datadog ($40 billion market cap), UiPath ($32 billion market cap), monday.com ($10 billion market cap), and Anaplan ($8 billion market cap), entrepreneurs and investors took note. Founders saw validation that building an enduring cloud company outside Silicon Valley was indeed achievable. And as the ambition levels of those entrepreneurs spiked, investors paid attention.

The pandemic further accelerated this trend with VCs investing in founders they’ve never met in person, reducing the barriers of physical proximity even more. The playing field has been leveled. Now, we see a flywheel in motion as the ecosystem, talent, and funding are in place across an increasing number of geographies across the world.

New Paradigm #2

Product and developer communities rule the day

In the old rules of software, you would hire a large enterprise sales team that would sell your product to customers top-down. But modern software companies know that bottoms-up growth is a powerful way to scale, and that community is not just an afterthought — it’s a strategic advantage, both for developers and customers. We’ve seen IT budgets now extend far beyond CIOs to also include lines of business and developers.

Two critical interrelated trends have emerged: the importance of cultivating a community around your company and product; and product-led growth.

Cloud 100 companies such as Automattic, Databricks, DataRobot, Hashicorp, Postman, and Snyk have demonstrated the power of nurturing and investing in their communities as a means of driving greater adoption. With the rise of open-source software in parallel, companies are looking to ship product with greater agility and speed than ever. These developer communities have become the foundation of category-defining companies.

We’ve also seen just how quickly growth can happen when companies adopt a product-led growth model, as evidenced by companies such as Contentful, Canva, Figma, Gong, Highspot, Hopin, Pendo, and Zapier. The North Star for these businesses is not just about landing a new customer; it’s about optimizing the user experience, making it simple to deploy their software and actively engaging their passionate user base.

When we first started the Cloud 100 six years ago, there were only a handful of companies that adopted community and product-led growth as strategic vectors for growth. We now see how critically important this has become and expect to see an even greater number of cloud companies that will adopt this framework going forward.

New Paradigm #3

Every software company can be a fintech company

Just a short while ago payments were dominated by a few behemoth players who seemed to be invincible. Banking regulations and incredibly steep barriers to entry made it nearly impossible to compete with financial institutions that controlled trillions of dollars. But a new API-led infrastructure has enabled entrants to invent novel business models.

The valuation of fintech companies on the Cloud 100 rose 461% since 2019, reaching $146 billion this year — more than a quarter of the value of the entire list. Part of that increase can be attributed to the pandemic: as shoppers moved online, e-commerce penetration in one quarter grew to 33%, representing the equivalent growth of the previous ten years combined.

Three of this year’s top ten Cloud 100 companies are pure fintech plays: Stripe, Plaid, and Checkout.com. Newer entrants, such as Airwallex, Flutterwave, and Razorpay are taking digital payments to the rest of the world, while companies such as Forter keep e-commerce payment transactions secure.

In addition to dedicated digital payment platforms, vertical SaaS companies are embedding fintech options into their products. Now customers of vertical solutions such as Procore, ServiceTitan, and Toast, can seamlessly process payments and payroll in their existing workflows. Restaurateurs, for example, can use Toast’s point of sale software to manage restaurant operations while also managing payroll for their cooks and waitstaff. These lines will continue to blur, and we expect to see more financial innovation in the cloud software ecosystem.

The new rules of software and business are still being written. We expect that next year’s Cloud 100 will teach us even more about the way the world will work in the future. Meanwhile, please join us in congratulating the current batch of billion-dollar cloud companies!

For more data, insights, and videos from this year’s Cloud 100, visit: https://bit.ly/2021cloud100