In collaboration with Paddle, we surveyed over 100 European SaaS companies, ranging from early-stage ventures to late-stage growth. The report evaluates key performance metrics including growth, revenue retention, and operational efficiency, which are critical to navigating the current market environment.

The report also explores public market valuations, M&A trends and fundraising activity in the European SaaS sector. It includes a detailed review of deal activity, highlighting quarterly trends and providing country-specific analysis.

Alexis Scorer, Partner at GP Bullhound, commented: “This year’s survey demonstrates encouraging progress across the European SaaS sector, with companies displaying continued improvements in gross margins, operational efficiency, and overall profitability. Nearly half of companies surveyed are now EBITDA positive, highlighting the continued emphasis on capital efficient growth. Despite subdued fundraising volumes, an increase in larger private placements and increasing M&A activity underscores the sector’s adaptability and resilience. With Public market SaaS valuations now above the three-year average and a renewed focus on profitable growth, the industry is well-positioned to benefit from an improving Macroeconomic environment in 2025.”

GP Bullhound European SaaS survey key takeaways

  • Growth rates remain stable for late-stage SaaS. Despite a slight overall decrease in growth in 2023 across the cohort surveyed, growth rates for the €50m+ ARR companies are broadly in line with the previous year.
  • Continued improvement in operational efficiency. ARR per FTE is approaching €150k for growth-stage companies and remains significantly above 2021 levels for €50m+ ARR companies, despite a slight reduction from last year.
  • Stable year-on-year Net Revenue Retention of 110%. Median Net Revenue Retention was 110% – 112% in 2023 for companies surveyed, nearly identical to rates these companies exhibited in 2022.
  • Broad improvements in Gross Margin year-on-year. All ARR cohort groups saw improvements in gross margin ranging from 1% – 7%, reversing the trend highlighted in last year’s survey.
  • Nearly half of all SaaS companies surveyed are now profitable. Continued improvements in profitability, with 44% of all companies now EBITDA positive, compared with ~33% in last year’s report.

Public Market European SaaS

  • SaaS valuations have increased above the 3-year mean. Average European SaaS valuations are trading at 6.7x, above the 3-year average of 5.4x.
  • Growing emphasis on profitable growth. Correlation between public market valuations for the European SaaS index and Rule of 40 performance has increased significantly, with a renewed emphasis on growth versus last year.
  • US vs EU SaaS valuation gap diverging again. Following a recent period of convergence between public US and European SaaS valuations, listed US SaaS companies are now valued at a 20%-40% premium over their European counterparts.

European SaaS Deal Activity

  • Resilient M&A volume in 2024 YTD. Strong M&A activity in the YTD period signals early stages of recovery following several quarters of consecutive growth.
  • Growing proportion of larger late-stage fundraisings. Whilst fundraising activity remains muted, deal value has begun to recover with a notable increase in the proportion of $250m+ transactions in 2024 YTD.

Enquiries
For any enquiries, please contact:
Alexis Scorer, Partner, at alexis.scorer@gpbullhound.com
For press inquiries, contact: press@gpbullhound.com. 

About GP Bullhound
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to the world’s best entrepreneurs and founders. Founded in 1999 in London and Menlo Park, the firm today has 13 offices spanning Europe, US and Asia. For more information, please visit www.gpbullhound.com.

We guide SaaS founders, CEOs and investors on how to navigate market challenges while highlighting the performance indicators of companies most likely to emerge stronger.

We surveyed over 100 SaaS companies across Europe in partnership with HSBC Innovation Banking, from startups to late-stage scaleups. We analyse the trends and compare key metrics including growth, headcount productivity and revenue retention, which are critical to navigating the current environment.

The report also explores public market valuations, M&A and fundraising in European SaaS, including the quarterly evolution of deal activity along with a country-specific breakdown of what’s trending.

Alexis Scorer, Partner at GP Bullhound, commented: “The focus on capital efficient growth highlighted in last year’s report has been evidenced by this year’s survey, indicating broad improvements in operational efficiency across the European SaaS sector. Despite the continued decline in SaaS fundraising volumes, M&A activity has proved resilient and remains well above pre-pandemic levels for European SaaS.”

European SaaS survey – key takeaways

  • Median ARR growth for SaaS companies with over €25m ARR declined from 44% in 2021 to 27% in 2022
  • Significant increase in ARR per FTE to €124k; average grows by 30% vs last year’s report
  • Slight improvement in Net Revenue Retention from 104% to 105% YoY
  • Median gross margins fell from 80% in last year’s report to 75% this year
  • Over a third of companies surveyed now profitable and c.40% of cohorts with ARR growth below 60% are profitable

European SaaS deal activity – key takeaways

  • Despite the decline in fundraising volume since the Q2 2022 peak, total funds raised are above pre-Covid levels $4bn–$5bn per quarter
  • SaaS M&A activity remains resilient with 178 transactions per quarter 2023 YTD, 30% above 3-year average

European SaaS public market – key takeaways

  • Valuation gap between public US and European SaaS companies stabilised in 2023
  • Revenue multiples for listed European SaaS companies recovering from c.4.3x at the start of the year to 4.8x in October

    Multiples for listed SaaS companies reboundin

Enquiries
For any enquiries, please contact:
Alexis Scorer, Partner, at alexis.scorer@gpbullhound.com

About GP Bullhound
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to the world’s entrepreneurs and founders. Founded in 1999 in London and Menlo Park, the firm today has 14 offices spanning Europe, the US and Asia.

EcoVadis is a leading provider of globally trusted business sustainability ratings, delivered via its SaaS platform. The company assesses the quality of the sustainability management systems of their clients and their supply chain to provide a holistic view of sustainability and ESG policies and practices.

Founded in France in 2007, EcoVadis has onboarded more than 850 multinational enterprises, as well as their network of more than 100,000 rated companies in 175 countries and over 200 industries.

For more information, please visit www.ecovadis.com.

Founded in France, EcoVadis is a leading provider of globally trusted business sustainability ratings. The company assesses the quality of the sustainability management systems of their clients and their supply chain to provide a holistic view of sustainability and ESG policies and practices. As ESG engagement becomes a key topic for senior leadership, EcoVadis’ solution acts as a category changer while addressing a massive market with strong secular tailwinds.

ESG and sustainability trends have gained momentum in recent years, primarily due to mounting pressures from consumers, employees, and regulators. Today, we believe sustainability has become a critical aspect for global businesses which enabled EcoVadis to onboard more than 850 multinational enterprises, as well as their network of more than 100,000 rated companies in 175 countries and over 200 industries.

Frédéric Trinel, Co-founder and Co-CEO of EcoVadis, said: “This investment enables us to build on our traction to meet companies at any stage of their sustainability journey, and collaboratively drive improvement in practices and impact at scale. GP Bullhound has been an exceptional partner to us, and we appreciate their ongoing support in helping us delivering and expanding our mission.”

Manish Madhvani, Co-founder and Managing Partner at GP Bullhound, commented: “We have been following Frédéric and Pierre-François since 2016 and there are very few entrepreneurs like them, especially in the ESG space. Not only have they managed to build the clear category leading product, but have helped over 100,000 businesses increase the transparency of their supply chain. Supply chains are notoriously tricky and are a significant part of the total impact products have on the climate and society. Understanding the total impact is not only table stakes for companies, but consumers require it and we are thrilled to accompany EcoVadis in their journey towards a more sustainable business environment.”

GP Bullhound invested through Fund VI. Other recent investments include Connex One, Typeform, causaLens, HackerOne, Whoop, Patreon, DuckDuckGo, Discord, Revolut, and Klarna, among many others.

Enquiries
For enquiries, please contact:
Hampus Hellermark, Principal, at hampus.hellermark@gpbullhound.com
Lina Baamer, Associate, at lina.baamer@gpbullhound.com

About GP Bullhound
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to the world’s best entrepreneurs and founders. Founded in 1999 in London and Menlo Park, the firm today has 13 offices spanning Europe, the US and Asia. For more information, please visit www.gpbullhound.com.

Data-driven investment process is revolutionising European financial services. European tech companies are attracting top global equity investors, corporate partners, and customers. The continent is no longer dominated by one or two hubs: unicorns have emerged in 28 countries and 98 cities, and a total of $275bn was created in exits via M&A, IPOs, direct listings, and SPACs in 2021 alone, marking an exceptional and record-breaking year for entrepreneurial activity and investment flows. Market observers believe that Europe has the strongest ever startup pipeline, on a par with the US, and the future is looking bright.

At GP Bullhound, we serve the needs of the world’s best entrepreneurs with transactional advice, research insights and capital, prioritising the development of data-driven lending products and outstanding customer experience to gain competitive advantage. We believe traditional lending products no longer have the right product or market fit: standardised term sheets with warrants and poorly designed covenants constitute a major hurdle for later-stage tech companies.

By making investments into IT and fully adopting the right data infrastructure and analytic tools across the investment process, lenders can gain higher profitability and stronger security, leading to better, simpler, and more flexible growth lending products, while also improving profitability, risk management and performance for the lenders. The rise of European tech requires a new approach to lending.

Enquiries
For enquiries, please contact:
Olya Klueppel, Partner, at olya.klueppel@gpbullhound.com

About GP Bullhound
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to the world’s best entrepreneurs and founders. Founded in 1999 in London and Menlo Park, the firm today has 10 offices spanning Europe, the US and Asia. For more information, please visit www.gpbullhound.com.

Based in Paris, Believe is a next-generation music label for the streaming era, helping artists to distribute their music online, and to build their audience and careers across several platforms. As streaming services have boosted the growth of music consumption, Believe is challenging major labels through its tech-based platform, currently servicing more than 850,000 artists.

GP Bullhound advised Believe on its funding round led by TCV in November 2014, and since then has also invested in the company across several funds. The relationship builds upon GP Bullhound’s experience with Spotify, Tunigo, and we7 in the digital music space. Over the years, GP Bullhound supported Believe by identifying bolt-on M&A opportunities and helping to solidify its brand with research and events.

Denis Ladegaillerie, Founder and CEO of Believe, commented: “GP Bullhound has been a crucial partner in helping us scale the company. They have been a strategic advisor, investor and trusted friend through our geographic expansion and multiple acquisitions.”

Manish Madhvani, Co-Founder and Managing Partner at GP Bullhound, said: “Believe was founded to disrupt the music industry by offering artists an efficient alternative to traditional music labels, allowing them to own their careers. We want to congratulate Denis and his team for such an important milestone and we are excited for the road ahead, as Believe continues towards its vision of becoming the leading music label of the digital era.”

Enquiries
For enquiries, please contact:
Manish Madhvani, Managing Partner, manish.madhvani@gpbullhound.com
Joy Sioufi, Partner, joy.sioufi@gpbullhound.com
Alessandro Casartelli, Executive Director, alessandro.casartelli@gpbullhound.com
Alon Kuperman, Executive Director, alon.kuperman@gpbullhound.com
Carlos de la Esperanza, Associate, carlos.delaesperanza@gpbullhound.com

About GP Bullhound
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to the world’s best entrepreneurs and founders. Founded in 1999 in London and Menlo Park, the firm today has 10 offices spanning Europe, the US and Asia. For more information, please visit www.gpbullhound.com

Company Name: Believe SaS

Website: www.believedigital.com

Incorporation year: 2005

Geography: France

Company and Industry in brief: The company delivers a transparent, artist-friendly service with a proven ability to boost revenue for their clients.
The company is active in the $5Bn+ recorded music market and is successfully winning artists from major labels and a fragmented landscape of competitors. A clear trend in the space is digitalisation (Spotify, Youtube, iTunes) which drives volume and creates new markets through enhanced discovery. And within digitalisation, streaming is growing the fastest.