The State of European SaaS

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As we proceed via a world financial downturn, each trade is confronted with a set of challenges and alternatives.

SaaS is not any exception. We’ve seen the headlines of hiring freezes, layoffs, and poor inventory performances. However happily, it’s not all doom and gloom. Actually, TechCrunch not too long ago shared a vibrant spot that U.S. enterprise capital exercise within the third quarter “was removed from catastrophic”, suggesting it could even be an excellent time to construct a SaaS enterprise. 

Recognizing the regional nuances of our trade, I’ve been to listen to from companions, prospects, and different SaaS leaders throughout the globe. Final month, I used to be lucky to go to G2’s London workplace and likewise converse at SaaStock in Dublin. 

The Accel 2022 Euroscape 

At SaaStock in Dublin, I loved connecting with Philippe Botteri, accomplice at Accel, shortly after he and Accel VP Richard Kotite unveiled The Accel 2022 Euroscape. The theme of this yr’s report is “The Reset” — and the introduction of their evaluation speaks to exactly why it’s time to strategy SaaS in Europe with a contemporary mindset:

“On the general public aspect, $1.6T of market capitalization has been misplaced within the international Euroscape cloud Index with the common ahead income multiples plunging from 17x a yr in the past to 6x as we speak. On the non-public aspect, cloud funding in Europe, Israel, and the US is down 42% in Q3.”

Regardless of this much-needed reset, Accel notes that tendencies like digital transformation and shifting to the cloud stay sturdy. Moreover, whereas the general funding decline in Europe and Israel is per what’s been taking place within the U.S., we’ve nonetheless seen massive rounds of funding occurring over the previous 12 months.

The position of buyer centricity in European SaaS winners 

Figuring out that it’s nonetheless attainable to win in a down market, who’re the Euroscape leaders which have collectively raised $8B? And, what are the keys to their success?

One commonality they share, which I used to be happy to study, is that they’re fueled by larger scores and extra opinions on G2.

Screen Shot 2022-11-09 at 11.12.57 AM

For context, G2 scores merchandise and distributors primarily based on the 1.9M+ verified peer opinions gathered from our person neighborhood, in addition to information aggregated from on-line sources and social networks.  With this technique in thoughts, European SaaS firms who’ve larger G2 scores – and subsequently have larger buyer satisfaction – usually tend to be market leaders. 

It’s at all times been necessary to have comfortable prospects, however throughout occasions like these, it’s essential to double down on treating your prospects as your Most worthy advertising belongings.

My takeaways and forecast

Whereas SaaS funding will possible be down for a minimum of just a few quarters, we stay very bullish on the prospects for European and international SaaS innovation and development.

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We met so many high-energy SaaS leaders and entrepreneurs in Dublin who’re constructing the following technology of high-value SaaS apps. Thus, we’re assured extra international leaders like UiPath, Celonis, and Miro will emerge from Europe.

We have additionally shared our 5 key classes discovered on how you can climate an financial downturn, providing extra insights on how you can survive and in the end thrive via these difficult occasions.



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