Frontline Ventures - European Expansion Report 2023
Frontline Ventures have published their 2023 European Expansion Report.
They studied 210 VC-backed B2B software companies that had expanded into Europe since 2010. On top of the survey Frontline spoke to 30 current EMEA GMs and former VPs and GMs.
Download the full report to get over 30 pages of analysis, but here are five learnings that will guide your thinking.
Top performing US companies rely on Europe at IPO
As US companies scale up past $50m ARR and hunt for more TAM to continue their revenue growth, Europe makes up an increasing percentage of revenues, with top performers seeing nearly 30% of revenues from the region.
European expansion starts at Series B
As I covered in my Series B Founder’s Guide to Revenue Operations, it is after Series B funding when international expansion starts to be a priority.
The need to increase TAM drives founders beyond their own shores.
This chart shows that early international teams at Seed and Series A are often driven by the need for development talent, but at Series B it switches to being about Go To Market expansion.
Europe is not one market
Any US company that treats Europe like a single market is going to get a quick lesson in cultures, languages and attitudes to security.
I have felt this chart in multiple companies as we have rolled out across Europe, but it is the first time I have seen it visualised.
The UK and Ireland is closest to the US in terms of language, attitude to technology, pricing and legal contracts.
The Nordics (four very different countries) and BeNeLux (three very different countries) are smaller markets but relatively straightforward. Very technological cultures, comfortable speaking English and clear negotiators.
European leadership is tough
The typical first hire for a US company in Europe is a VP - VP of Sales, VP of Marketing who lands and starts to build a core team around them.
Only 42% of companies had a General Manager role within three years of launching in Europe.
And of those GM’s the average tenure is under two years.
Only half have local Revenue Operations teams
Supporting a GM and their team across multiple timezones is challenging - and for individual functions, it can drive them to maintain direct reporting lines into HQ.
In the Go To Market teams this is more common with marketing than any other function.
It is also interesting to note that 48% of companies are yet to hire any local Revenue Operations teams.
Given the strategic nature of Revenue Operations interviewing buyers, mapping out local content needs and local contracting and onboarding processes this seems a risk.
Europe is not a single market, and introduces more revenue complexity than will be found in the domestic market.
Therefore consider bringing Revenue Operations in earlier, or complementing with local Revenue Operations as a Service providers.
Get the full report
These are just a few of the insights from the Frontline Ventures report.
Any US companies planning to expand to Europe or any other region would be well advised to read it.
And in the same way, any European companies planning to expand into the US can learn from the successes in the opposite direction.
Get started
Whenever you are ready, there are three ways that I can help you accelerate your revenue.
Buyer Experience Audit - I’ll impersonate a buyer researching your segment and company and let you know what I find. Ideal for planning your Revenue Operations strategy.
Business Model Design Workshops - I’ll work with you and your team to design or refine a business model for a new or existing product.
RevOps Impact Playbooks - I’ll help you implement one or more tactical processes across your revenue teams - content, referrals, testimonials, adoption and more.