2023 EUROPEAN SAAS SURVEY
Key takeaways
FOREWORD
Significant increase in ARR per FTE to €124k
ARR per FTE exceeds €100k above €5m ARR. Average has
grown 30% vs 2022 GP Bullhound European SaaS report
Increased emphasis on profitability with Rule of 40
Correlation of revenue multiples to Rule of 40 has doubled
while correlation of multiples with profitability has grown 14x
Median ARR growth declined significantly to 27%
Median ARR growth has decreased from 44% in 2021 to
27% in 2022 for SaaS companies with more than €25m ARR
SaaS valuations stabilising in-line with 3-year mean
Average European SaaS valuations trading at 5x, close to the
3-year average
Slight improvement in NRR to 105% Year-on-Year
Median Net Revenue Retention for European SaaS businesses
was 105% in 2022, an increase from 104% in 2021
Multiples for listed SaaS companies rebounding
Average valuations across our public European SaaS have
rebounded by c.11%, with multiples increasing from c.4.3x at
the start of the year to c.4.8x by the end of October
c.5% decrease in Gross Margins from 2021 to 2022
Median gross margins have fallen from 80% in last year’s
report to 75% this year
Resilient M&A transaction activity in 2023 YTD
Average of 178 transactions per quarter in 2023 YTD, 30%
above the 3-year average
Over a third of companies surveyed now profitable
R&D and G&A spend broadly in-line with last year and c.40% of
cohorts with ARR growth below 60% are profitable
Market for capital raising remains subdued
2,466 total fundraising rounds 2023 YTD, a 47% decrease
YoY and a 65% decrease in rounds above €40m
Source: GP Bullhound Insights
