The State of European SaaS
As we proceed via a world financial downturn, each trade is confronted with a set of challenges and alternatives.
SaaS isn’t any exception. We’ve seen the headlines of hiring freezes, layoffs, and poor inventory performances. However fortuitously, it’s not all doom and gloom. In truth, TechCrunch not too long ago shared a brilliant spot that U.S. enterprise capital exercise within the third quarter “was removed from catastrophic”, suggesting it might even be a perfect 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 in addition communicate at SaaStock in Dublin.
The Accel 2022 Euroscape
At SaaStock in Dublin, I loved connecting with Philippe Botteri, companion at Accel, shortly after he and Accel VP Richard Kotite unveiled The Accel 2022 Euroscape. The theme of this 12 months’s report is “The Reset” — and the introduction of their evaluation speaks to exactly why it’s time to method SaaS in Europe with a recent mindset:
“On the general public facet, $1.6T of market capitalization has been misplaced within the international Euroscape cloud Index with the typical ahead income multiples plunging from 17x a 12 months in the past to 6x right this moment. On the non-public facet, 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 in line with what’s been occurring within the U.S., we’ve nonetheless seen massive rounds of funding occurring over the previous 12 months.
The function of buyer centricity in European SaaS winners
Realizing that it’s nonetheless doable 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 be taught, is that they’re fueled by greater scores and extra evaluations on G2.
For context, G2 scores merchandise and distributors based mostly on the 1.9M+ verified peer evaluations gathered from our consumer neighborhood, in addition to information aggregated from on-line sources and social networks. With this technique in thoughts, European SaaS corporations who’ve greater G2 scores – and subsequently have greater buyer satisfaction – usually tend to be market leaders.
It’s at all times been vital to have glad prospects, however throughout instances like these, it’s essential to double down on treating your prospects as your most beneficial advertising property.
My takeaways and forecast
Whereas SaaS funding will possible be down for at the very least a number of quarters, we stay very bullish on the prospects for European and international SaaS innovation and progress.
We met so many high-energy SaaS leaders and entrepreneurs in Dublin who’re constructing the following era 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 the best way to climate an financial downturn, providing extra insights on the best way to survive and in the end thrive via these difficult instances.