Europe is taking the lead in SaaS

Oct 26, 2021

Move over America! European SaaS companies are on the verge of world domination – and the numbers prove it. Let’s find out more.

It’s no secret that SaaS is one of the dominant industries globally. Gartner forecasts the SaaS industry to be worth $146 billion by the end of the year, growing to $172 billion in 2022. It was one of the few industries to do well out of the Coronavirus pandemic, as companies across every industry invested in SaaS solutions to make remote work more effective for their teams. 

The US has long been the centre of the SaaS industry. When you think SaaS, you probably think of organisations like Salesforce, Adobe and Zoom – all US giants. However, what you may not know is that the European SaaS sector is gaining on the US fast. A recent report by the VC firm Accel shows that startups from Europe (and Israel) will make up much of the next generation of SaaS heavyweights.

In this article, we’ll look at why Europe is fast becoming the place to be for SaaS.

 

Investment in European SaaS is higher than ever

The amount of capital raised by European SaaS organisations has reached a historic level – and it’s growing faster than that of the US. Between 2020 and 2021, funding for European (and Israeli) private cloud companies grew by 3.2x, compared to 2.4x in the US. 

US firms are still raising massive amounts of capital, but European firms are as well. For example, in June 2021, Celonis (an analytics startup from Germany) raised $1 billion in its Series D funding round. This made it the third biggest funding in the world so far this year.

Accel, who produced the report on the success of European SaaS, are a VC firm that puts its money where its mouth is. Five years ago, half of its investments in Europe were going to SaaS companies. Today, those investments are bearing fruit. 

 

European SaaS companies are worth more than ever before

The US used to be the only home in the world for heavyweight SaaS organisations, but that is changing. Valuations for European SaaS firms have almost doubled in the last year, with more and more companies than ever achieving milestone valuations.

The amount of new SaaS unicorns (startups valued at more than $1 billion) in Europe has shot up in the last year, moving from 44 in 2020 to 81 in 2021. Three European firms also achieved ‘decacorn’ status, with valuations of more than $10 billion (Checkout.com, Celonis and Talkdesk). Europe is creating big SaaS companies at a faster speed than the US.

The Accel report also identifies 100 European ‘soonicorns’ – companies with valuations at less than $1 billion but with high annual revenues above $1 million. Will we be talking about them reaching unicorn status this time next year?

 

More Saas IPOs and acquisitions than ever in Europe

2021 has been the year of the IPO for SaaS companies in Europe. There were eleven SaaS IPOs in 2021, compared to only three in 2020. Listing your shares on the open market is seen as the pinnacle of achievement for startups and is the ultimate goal for many founders – so it shows that Europe is doing something right. The US has still produced more IPOs for SaaS companies, with 21, but Europe is not far behind now.

There have also been more SaaS acquisitions than ever before in Europe, which is a sign of a thriving ecosystem. For example, London-based virtual event solution Hopin has made five acquisitions since the start of 2020, so it can continue its growth and offer its customers a five-star service. 

 

More opportunities for SaaS sales experts

In the past, SaaS sales experts based in Europe may have felt they needed to go to America to really prove themselves and earn the big bucks. Today, there’s never been a better time to be in SaaS sales, wherever you are in the world. In Europe, we now have a great mix of European SaaS natives, as well as American giants that have landed in places like London and Amsterdam to expand their footprints.

There are more SaaS companies in the marketplace than ever before – and they’re all looking for people with the right sales skills to help them achieve their growth targets. Since the pandemic, most offer flexible remote working for part of the week at least. The best companies will invest in developing your skills and help you plot a career path in the industry. 

If you’re looking for a career that will be fun and interesting, as well as well-paid, SaaS sales could be just the opportunity. At SaaSLeads, we give talented individuals the skills they need to succeed in sales. We work with some of the best SaaS companies in the business and open the door to join one of their sales teams and begin your sales career. What happens after that is up to you…

 

Find out more from SaaSLeads

At SaaSLeads.io, we recruit, develop and deliver SDRs to your organisation, ready to produce excellent results in your sales team. Our SDRs have an excellent grounding in the basics, ready to branch out into more advanced techniques.

Our extensive training programme teaches SDRs to generate excitement around the impact your product brings. First, they learn how to move your prospects through a structured sales process that leads to more won deals. Then, when they get to your company, they’re ready to produce unparalleled results. 

To find out more, contact us by filling out the form below.

Andrew Bell

Andrew is our Account Executive at the SaasLeads Academy.

He studied Ancient History at the University of Birmingham but got the sales bug. Upon graduating Andrew worked his way up the sales ladder, from SDR to Account Executive.

When he’s not in meetings generating pipeline you can catch him on the ski slopes or at the latest art gallery exhibition around London.

You can follow him on LinkedIn here

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