In this single‑speaker video, Akeel Jabbar – founder and general partner at Horizon Capital – examines how the COVID‑19 pandemic has reshaped the SaaS landscape and outlines the five sectors he expects to drive growth throughout 2020 and beyond. He begins by noting that, despite a broad sales dip of at least 40% for many SaaS firms, the pandemic has overall accelerated SaaS adoption, citing the rapid stock appreciation of Zoom and Twilio as proof points. He then walks through each of the five high‑growth areas: (1) Security – VPNs, password managers (e.g., LastPass) and remote‑access tools become essential as employees work from home; (2) Web conferencing – Zoom’s ubiquity in business, education, and even social events fuels continued expansion; (3) Team collaboration – platforms such as Slack, Atlassian, Trello and Asana see heightened demand for project management and communication; (4) Web and e‑commerce – Shopify, Wix and similar services benefit from brick‑and‑mortar retailers shifting online, driven by increased consumer ordering; (5) Apps and e‑learning – virtual schooling and online course platforms surge, with Twilio highlighted for its role in communications infrastructure. Jabbar observes that SaaS spend is outpacing overall IT budgets, though companies are becoming more selective, seeking tools that deliver efficiency and cost savings. He ends on a bullish note for SaaS investment in these five categories while warning that travel‑related SaaS firms remain risky. The video concludes with a call for viewer comments on other promising industries.
Chapters
According to Seeking Alpha, most SaaS companies saw a decrease of at least 40% in their sales from their 52-week high. My name is Akeel Jabbar. I am the founder and general partner at Horizon Capital, and today we'll be talking about the top 5 SaaS industry trends in 2020 and what does the future look like in a post-COVID-19 world. So even though there was a decrease in sales over the last few months after COVID-19 hit, in net, I would say the balance is that COVID has actually accelerated SaaS over the last few months. Now you can see that specifically with 2 specific cases, as you've seen, one being Zoom and number 2 being Twilio. So just check out their stock prices. You can see how they blew up in the last few months. And overall, it's pushing all the good companies in the right direction. Okay, so we're gonna talk about the top 5 industries today. Number 1, security systems. Okay, the industry of security is going to be continuing to grow for the rest of the year. You can see that with tools such as VPNs, password protection, remote work access. Companies need security because they have super valuable IP, they have important data They have a lot of passwords to share. And with working home, people taking their computers at home or working all over the world and there's people all around you, it's easy to lose access. So security platforms such as getting a VPN on your computer, I highly recommend getting one. Platforms and tools such as LastPass where you can share passwords securely with your team. Look at more of those type of businesses that will do really well. In 2020 and the security industry specifically. Number 2, web conferencing. So obviously, as I mentioned at the beginning, Zoom is a big one. We've been using Zoom for the last 3 or 4 years, and we can see that from using it in our team meetings. We use it for our podcasts, for conferences. Even schools are using it now, right? They're using— so a lot of universities, schools are using it to teach their students. A lot of online courses calls are happening through Zoom. I've also seen dance parties and clubs happening online. So whatever floats your boat, you could all do it through video now. And as you can expect, web conferences is going to continue to grow over the next year. Number 3, team collaboration tools. So tools such as, with more teams going remotely now, I think almost everybody working in office has now gone to remote bases. Team collaboration tools have become more and more important. Okay, you need to manage your projects now. They still need to be done. They still need to be delivered on time. And you need communication tools. Okay, so tools such as Slack have done really well. You can check out Atlassian. I really like as well. And then for project management tools such as Trello or Asana have done really well. So people need to stay communicating online and communicate with their team and make sure that the job is still being done. And I expect that to continue to grow more and more in that industry. Number 4, web and e-commerce. So you guys can see this with companies such as Shopify, Wix, and other e-commerce platforms where their stock has blown up over the last few months, and more and more companies are starting to sell online. So a lot of brick-and-mortar companies that were selling physically in their local city are now looking to build online websites so they can sell worldwide, countrywide, or even citywide and access more people. And with more and more people in their houses You can see that the people are actually ordering more. So you can see, you know, if you're working from home or you're teaching your kid classes from home, you're gonna need access to easy, convenient, and you want things delivered to your house. So I'm assuming you guys are purchasing more on Amazon, you're purchasing more online and getting stuff delivered to your house versus having to go to the store. So I'm gonna expect that e-commerce is gonna continue to blow up and will be for the remainder of our kind of our the rest of the year. Number five, apps and e-learning. Okay, that's another industry I see that's going to blow up for not only 2020 but also going forward. Now with more schools going more virtual, more going online, I see a lot of them are actually going to continue to do that where people are not going to have to go into a university or or a classroom to be learning their curriculum. There's going to be a lot more platforms online. And people are going to be purchasing online courses to complete their degree, their diploma, or any education that they want to learn online. Okay, another app that I really like, and as you can check out, their, their stock is almost 4x in the last couple months, is Twilio. Check out their stock, they're doing really well, and I see as being a big hit. So overall, what I would say is IT spend on SaaS, so you can see, has far outgrown faster than the actual IT budget. So there's been a budget in the last 5 years And people have actually been spending more than what they've been allocated. But what you'll see in the last few months is that people are actually cutting back more and they're being more cautious on their spend. So they're being— looking for more efficient tools and platforms to invest in that'll actually save them a lot of time, money, and work with their existing solution and company. Okay, so overall I'm very bullish on SaaS and expect spending to increase in these 5 areas and continue to grow. While avoiding companies such as, I would say, travel. That's another industry that I would be cautious about, and will probably be on the continuous decrease for the next couple of months. So I hope that was helpful, guys. Check out my next video coming up, and comment below with any other industries that you feel will be thriving in 2020. Thanks.
