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1、European SaaSreport2023In partnership withThis report is intended for professional investors only;see the back of the report for important disclosures.GP Bullhound Corporate Finance Ltd and GP Bullhound Asset Management Limited are authorised and regulated by the Financial Conduct Authority.GP Bullh
2、ound Inc is a member of FINRA.GP Bullhound Luxembourg S.r.l.is regulated by the CSSF in Luxembourg.December 20232023 EUROPEAN SAAS SURVEY“Last year,we published our first European SaaS report to benchmark key performance metrics and explore deal activity amid market uncertainty following a sharp dec
3、line in fundraisings in 2022.Given the challenging macroeconomic environment and the prevalent focus on cash preservation and profitability,it is unsurprising that growth levels across the European SaaS ecosystem remain muted,with early-stage and mature SaaS companies seeing a significant slowdown.T
4、his years report also highlights the continued focus on capital efficiency,with over a third of companies surveyed now profitable,and mature SaaS companies seeing significant improvements in headcount productivity.We include a public market update highlighting the emphasis on profitability and a mod
5、est rebound in European valuations,which have reverted in line with the 3-year mean.While 2023 has seen a significant decline in SaaS fundraising activity,overall funding remains above pre-pandemic levels.Despite the challenging market conditions,M&A activity has remained resilient.The recent growth
6、 in strategic M&A,combined with record levels of private equity dry powder has sustained quarterly deal activity following the mid-2022 peak,with$15bn of disclosed deals so far in 2023,surpassing the equivalent period last year.”ALEXIS SCORER,PARTNER AT GP BULLHOUNDThe view from GP BullhoundSource:G
7、P Bullhound Insights 2023 EUROPEAN SAAS SURVEYKey takeawaysFOREWORDSignificant increase in ARR per FTE to 124kSignificant increase in ARR per FTE to 124kARR per FTE exceeds 100k above 5m ARR.Average has grown 30%vs 2022 GP Bullhound European SaaS report Increased emphasis on profitability with Rule
8、of 40Increased emphasis on profitability with Rule of 40Correlation of revenue multiples to Rule of 40 has doubled while correlation of multiples with profitability has grown 14xMedian ARR growth declined significantly to 27%Median ARR growth declined significantly to 27%Median ARR growth has decrea
9、sed from 44%in 2021 to 27%in 2022 for SaaS companies with more than 25m ARRSaaS valuations SaaS valuations stabilising instabilising in-line with 3line with 3-year meanyear meanAverage European SaaS valuations trading at 5x,close to the 3-year average Slight improvement in NRR to 105%YearSlight impr
10、ovement in NRR to 105%Year-onon-YearYearMedian Net Revenue Retention for European SaaS businesses was 105%in 2022,an increase from 104%in 2021 Multiples for listed SaaS companies reboundingMultiples for listed SaaS companies reboundingAverage valuations across our public European SaaS have rebounded
11、 by c.11%,with multiples increasing from c.4.3x at the start of the year to c.4.8x by the end of Octoberc.5%decrease in Gross Margins from 2021 to 2022c.5%decrease in Gross Margins from 2021 to 2022Median gross margins have fallen from 80%in last years report to 75%this yearResilient M&A transaction
12、 activity in 2023 YTDResilient M&A transaction activity in 2023 YTDAverage of 178 transactions per quarter in 2023 YTD,30%above the 3-year averageOver a third of companies surveyed now profitableOver a third of companies surveyed now profitableR&D and G&A spend broadly in-line with last year and c.4
13、0%of cohorts with ARR growth below 60%are profitableMarket for capital raising remains subduedMarket for capital raising remains subdued2,466 total fundraising rounds 2023 YTD,a 47%decrease YoY and a 65%decrease in rounds above 40mSource:GP Bullhound Insights GP Bullhound European SaaS surveyGP BULL
14、HOUND EUROPEAN SAAS SURVEYDatasetoverviewRevenueanalysisCustomer acquisition and retention benchmarksOperationalefficiency analysisGP BULLHOUND EUROPEAN SAAS SURVEY15%23%9%13%14%17%9%Sales and marketingVertical SaaSCollaboration andworkflowInfrastructure andsecurityHR/ERPData and analyticsOther18%24
15、%12%35%11%20 FTE20-50 FTE50-100 FTE100-500 FTE500 FTE+37%13%12%21%17%5m5-10m10-25m25-100m100m+45%35%9%12%5m5-25m25-100%due to rounding GP BULLHOUND EUROPEAN SAAS SURVEYDatasetoverviewRevenueanalysisCustomer acquisition and retention benchmarksOperationalefficiency analysisGP BULLHOUND EUROPEAN SAAS
16、SURVEYEarly-stage European SaaS companies(5m ARR)have demonstrated higher median 2020/22 CAGR than other cohorts,as one might expect given the lower base.As companies grow into the next band(5m 25m ARR),the range of CAGRs drops only by c.10%across the whole cohort,indicating a healthy appetite for g
17、rowth,even as some companies generate five-fold the ARR of those who are more early-stage.However,as businesses begin to scale beyond 25m ARR,not only does the median CAGR decrease to c.40%across both cohorts,the spread of ARR CAGR begins to tighten,deviating no more than 25%from the median data poi
18、nt.2-year ARR CAGR significantly impacted by low 2021/22 growth,which declined to 27%from 45%in 2020/21ARR ANALYSISARR FY20/22 CAGR(%)/ARR(m)MinMinMaxMaxMedianMedian75th percentile75th percentile25th percentile25th percentileData covers company fiscal years 2020 and 2022Source:GP Bullhound Insights
19、GP BULLHOUND EUROPEAN SAAS SURVEYAcross the European SaaS ecosystem,increases in year-on-year growth have been muted across 2022,with only the 5m 25m cohort benefiting from a marginal increase in incremental growth compared with 2021.We note that a number of our respondents in the 5m25m ARR cohort h
20、ave recently raised funds(38%having raised in 2022 or later),which has allowed companies to invest in their growth,despite less favourable macro conditions.This is discussed in more detail on page 22.Two cohorts experienced their growth decrease by c.50%or more:early-stage SaaS companies,whose media
21、n growth fell from 100%to 33%,and mature SaaS companies(50m+ARR),whose median growth fell from 45%to 24%.Growth across all subsets of European SaaS companies was muted throughout 2022 compared to 2021ARR ANALYSISARR YoY Growth(%)/ARR(m)MinMinMaxMaxMedianMedian75th percentile75th percentile25th perce
22、ntile25th percentile5m ARR5m 25m ARR25m 50m ARR50m+ARR100%38%125%200%0%0%33%50%25%8%20%33%67%100%17%22%35%50%85%83%61%39%26%13%21%35%48%57%90%72%45%29%13%50%55%24%14%2%Data covers company fiscal years 2021 and 2022Source:GP Bullhound Insights GP BULLHOUND EUROPEAN SAAS SURVEYSignificant improvements
23、 in headcount efficiency amongst the larger cohorts(50m+ARR)AVERAGE ARR PER FTE ANALYSISAverage ARR per FTE(000)74.994.9124.4142.281.3113.9126.3279.25m5-25m25-50m50m+2022 European SaaS Report2023 European SaaS ReportDecDec-21 ARR21 ARRData covers company fiscal years 2021 and 2022Last year,we observ
24、ed that as European SaaS businesses scale,the hiring focus switches more from R&D to those roles which are directly linked to ARR generation(such as sales and marketing).For businesses under 50m ARR,this trend has remained consistent across our 2022 dataset,with 100k per FTE being achieved above 5m
25、ARR.Additionally,we note that each cohort has experienced an increase in ARR per FTE YoY,reflecting a greater emphasis on capital efficiency in the more challenging funding environment.Mature SaaS companies have almost doubled their ARR per employee from 142k to 279k between 2021 and 2022,suggesting
26、 that more mature SaaS companies have made significant cuts in headcount across 2022 while seeing minimal impact on revenue.However,it is worth noting that the constituents in this years survey differ mildly from last year and thus may cause some disparity in like-for-like trends.Source:GP Bullhound
27、 Insights GP BULLHOUND EUROPEAN SAAS SURVEYDatasetoverviewRevenueanalysisCustomer acquisition and retention benchmarksOperationalefficiency analysisGP BULLHOUND EUROPEAN SAAS SURVEYEnterprise customers typically generate an ARR which is 10-fold that of SME customersARR per customer by target custome
28、r group(000)Data covers company fiscal year 2022Average CAC by target customer group(000)Data covers company fiscal year 2022ARR ANALYSIS6.163.259.8SMEEnterpriseSME andEnterprise6.828.866.1SMESME andEnterpriseEnterpriseThe average ARR for Enterprise-focused SaaS companies is 63k,which is over 10 x h
29、igher than those who are SME-focused at 6k.This trend is also reflected across Customer Acquisition Costs,of which Enterprise-focused SaaS companies spent 66k per acquired customer and SME-focused companies spent 6k.Interestingly,SaaS companies that are focused on both customer segments demonstrate
30、a similar ARR per customer to Enterprise-focused SaaS companies,but their CAC is significantly lower.This is partially driven by sector segmentation,as we note that 50%of our Enterprise respondents specialise in Infrastructure&Security or Data&Analytics two industries that operate lower velocity sal
31、es models.Source:GP Bullhound Insights GP BULLHOUND EUROPEAN SAAS SURVEYSaaS companies which are focused on one set of customers command higher LTV/CAC ratiosCAC ANALYSISAverage LTV/CAC by target customer groupData covers company fiscal year 2022Average LTV/CAC by product offering categoryData cover
32、s company fiscal year 2022European SaaS companies which focus on both SME and Enterprise-grade customers have an average LTV/CAC of 5.8x,significantly lower than those who only tailor their focus to one customer group.SME-focused SaaS companies typically have an LTV/CAC of 8.3x,while the LTV/CAC of
33、Enterprise SaaS companies is marginally higher at 8.9x.SaaS companies operating in the HR/ERP space have the highest LTV/CAC of 10.8x,while Sales&Marketing SaaS companies have the lowest at 4x.10.8x10.6x10.0 x7.8x5.3x4.0 x4.2xHR/ERPCollaborationand workflowVertical SaaSInfrastructureand securityData
34、 andanalyticsSales andmarketingOther8.3x8.9x5.8xSMEEnterpriseSME andEnterpriseSource:GP Bullhound Insights GP BULLHOUND EUROPEAN SAAS SURVEYCAC and ARR both increase substantially as contract duration increasesAverage CAC by contract duration(000)Data covers company fiscal year 2022CAC ANALYSIS2.426
35、.718.0 39.5 39.5 30.2 30.21 year1 year2 years3 years3+yearsAverage ARR by contract duration(000)Data covers company fiscal year 20226.816.714.9 24.6 24.6 23.2 23.21 year1 year2 years3 years3+yearsContracts which span three years in duration are the costliest to acquire,requiring an average spend of
36、39.5k per customer.Companies who service longer-term contracts are typically rewarded with higher ARR on average,with mean ARR increasing from 6.8k for contracts less than one year in length to 20k+for contracts spanning three years or longer.We note that companies which operate on longer contract t
37、erms may yet to feel the true impact of the current economic headwinds.This is especially true of those servicing contracts of over three years,as these would have been negotiated at the height of the technology boom and therefore operate on terms more favourable than what would be seen in the curre
38、nt environment.Source:GP Bullhound Insights GP BULLHOUND EUROPEAN SAAS SURVEYMost European SaaS companies have a payback period of 10 12 monthsAverage payback period by target customer group(months)Data covers company fiscal year 2022The payback period for European SaaS companies steadily declines a
39、s ARR grows;those with 50m+ARR typically have payback periods of nine months,while more early-stage SaaS businesses have payback periods of 13+months.This is usually for one of three reasons:1.The SaaS business has a high volume of customers,allowing them to leverage lower CAC through scale;2.The Sa
40、aS business has a low volume of high-value contracts,the value of which begins to outpace CAC as ARR scales;or3.As ARR increases,a companys Sales&Marketing function grows more mature,leading to greater spend on customer acquisition.Pure Enterprise-focused SaaS companies exhibit the longest payback p
41、eriods(14 months),while those focused on both Enterprise and SME companies have the shortest payback periods(9 months).Average payback period by product offering category(months)Data covers company fiscal year 2022PAYBACK PERIOD ANALYSIS11.813.79.3SMEEnterpriseSME andEnterprise13.014.410.99.45m5-25m
42、25-50m50m+Source:GP Bullhound Insights GP BULLHOUND EUROPEAN SAAS SURVEYFY21FY22Only SMEs experienced a decline in GRR YoY(down from 95%in 2021 to 92%in 2022),while Enterprise&SME-and Enterprise-focused SaaS companies both maintained marginal 1%improvements.However,as noted earlier in the report,the
43、se companies typically have longer contract durations(sometimes greater than three years).Therefore,it may be the case that recent economic headwinds have not yet impacted Gross Revenue Retention metrics.Additionally,we note that some respondents may have excluded down-sell from their calculations,t
44、hereby driving higher median rates across the dataset.Only SME-focused SaaS companies experienced a decline in Gross Revenue Retention between 2021 and 2022RETENTION ANALYSISGross Revenue Retention(%)SME-focused FY21 vs FY22FY21FY2270%75%80%85%90%95%100%FY21FY2290%90%Represents 75th and 25th percent
45、ile of respondent distributionMedian95%92%90%91%93%94%Gross Revenue Retention(%)Enterprise-focused FY21 vs FY22Gross Revenue Retention(%)SME&Enterprise-focused FY21 vs FY22Source:GP Bullhound Insights GP BULLHOUND EUROPEAN SAAS SURVEYFY21FY22Retention metrics are critical drivers of growth for Europ
46、ean SaaS companies.Net Revenue Retention(NRR)is considered by many to be the strongest indicator of long-term success.NRR is therefore an interesting barometer of the European SaaS ecosystem.Across the board,median NRR has increased YoY,with the spread of data points also tightening.In times of tigh
47、tening spend and access to funding,there is a greater emphasis on retaining customers and generating upsell as it is a more capital efficient way of maintaining growth.Net Revenue Retention rates increased across all categories of European SaaS companies across 2022RETENTION ANALYSISNet Revenue Rete
48、ntion(%)SME-focused FY21 vs FY22FY21FY2285%90%95%100%105%110%115%120%125%FY21FY22100%100%98%104%105%107%103%106%Net Revenue Retention(%)Enterprise-focused FY21 vs FY22Net Revenue Retention(%)SME&Enterprise-focused FY21 vs FY22Source:GP Bullhound Insights Represents 75th and 25th percentile of respon
49、dent distributionMedianGP BULLHOUND EUROPEAN SAAS SURVEYDatasetoverviewRevenueanalysisCustomer acquisition and retention benchmarksOperationalefficiency analysisGP BULLHOUND EUROPEAN SAAS SURVEYGross Margins have come down c.5%across all revenue bands since 2021OPERATIONAL EFFICIENCY ANALYSISGross m
50、argin(%)/ARR(m)Data covers company fiscal years 2021 and 2022DecDec-22 ARR22 ARR75%79%80%80%70%74%77%74%5m5-25m25-50m50m+2022 European SaaS Report2023 European SaaS ReportFor SaaS companies,direct costs include but are not limited to:Hosting costsCustomer support/customer success costsThird-party li
51、censes utilised in the softwares applicationLast year,we observed that as a business scales beyond 5m ARR,Gross Margins stabilise at 80%due to diminishing returns on efficiency gains.While this trend has somewhat continued into 2022,Gross Margins have instead stabilised at 75%,as SaaS companies have
52、 struggled to pass on inflationary pressures such as higher direct costs(including those relating to hosting and customer success).It may also be the case that contract renewals are typically needed for price increases.While many of our respondents operate multi-year contracts,we see more SaaS compa
53、nies implementing inflationary price increases this year,as and when contract renewal is due.Source:GP Bullhound Insights GP BULLHOUND EUROPEAN SAAS SURVEY40%60%39%61%44%56%36%64%Over one third of companies across all ARR growth cohorts were profitable in 2022EBITDA MARGIN ANALYSISProportion of prof
54、itable companies(%)by 21/22 ARR growthIn 2022,c.40%of companies with 21/22 ARR growth less than 60%were profitable,with the 60%+ARR growth cohort containing marginally fewer profitable companies(36%).This would indicate that growth rates were not a particularly strong indicator of profitability in 2
55、022,with the proportion of profitable companies remaining broadly consistent across all ARR growth cohorts.Data covers company fiscal year 202220%ARR growthARR growth20%-40%ARR growthARR growth40%-60%ARR growthARR growth60%+ARR growthARR growthProfitableProfitableUnprofitableUnprofitableSource:GP Bu
56、llhound Insights GP BULLHOUND EUROPEAN SAAS SURVEYThe results of our survey suggest that total overheads as a proportion of revenue typically total 70%to 90%for European SaaS companies of all sizes.This is lowest for companies between 5m and 25m ARR(typically before the Sales&Marketing function begi
57、ns to scale)and highest for those above 25m ARR(where access to capital increases).Our data shows that Research&Development costs continue to decline as a proportion of revenue as ARR increases.By contrast,once ARR grows above 25m,Sales&Marketing and General&Administrative expenses both tick up shar
58、ply,as more costs are spent on areas which directly generate ARR.R&D expense as a proportion of revenue declines steadily as SaaS businesses scale,shifting focus to Sales&Marketing,which peaks at 40%OPERATIONAL EFFICIENCY ANALYSISCost build up(%)as a function of revenue(m)Data covers company fiscal
59、year 202230%26%40%36%26%24%21%19%33%5m5-25m25m+Sales&MarketingResearch&DevelopmentGeneral&AdministrativeDecDec-22 22 ARRARRSource:GP Bullhound Insights GP BULLHOUND EUROPEAN SAAS SURVEYSignificant 21/22 ARR growth was demonstrated most by companies who raised funds in the last 12 monthsFUNDING ENVIR
60、ONMENTAverage 21/22 ARR growth(%)by date of latest funding roundAverage 21/22 ARR growth(%)by date of next funding roundData covers company fiscal year 2022;Excludes 5m ARRData covers company fiscal year 2022;Excludes 90%,whereas others have margins of sub-80%.SAP,for example,has a blended margin of
61、 72%(although it is worth noting that SAPs gross margin contains service revenue,which carries a margin of c.22%.Their Software-dedicated gross margin is 89%,more in line with a typical pure SaaS player).This indicates that pure SaaS players should benchmark to GM%of c.80%or above.Gross Margin of GP
62、 Bullhound European SaaS indexData covers company fiscal year 2022PUBLIC EUROPEAN SAAS MARKETEUROPEAN SAAS PUBLIC MARKET UPDATEBenchmarking publicly listed European SaaS companiesPUBLIC EUROPEAN SAAS MARKETSources:GP Bullhound Insights and Capital IQ(30 September 2023)Most public SaaS companies expe
63、rienced moderate revenue growth of between 15%25%41%28%17%10%(12%)Net Revenue Retention metrics are broadly comparable with private SaaS companies,with a median of c.100%105%81%97%110%114%137%Gross Margins are typically more widely spread between 70%and 90%,given broader definitions in cost allocati
64、ons,revenue mix,and scale of revenues96%92%83%72%53%Given their relative maturity,the volume of public European SaaS companies which are profitable(c.10%+)is higher than those which are privately listed52%29%20%6%(30%)Over half of our public European SaaS companies are below the 40%EBITDA margin+Rev
65、enue Growth threshold for premium valuations65%44%27%15%(28%)European SaaS deal activityEUROPEAN SAAS DEAL ACTIVITYQuarterly deal volume has proved resilient in light of current macroeconomic conditions,with the first two quarters of 2023 on par with Q4 2022.Additionally,while deal volumes have been
66、 declining across 2023,all quarters have remained above the long-term average of 137 deals per quarter.SaaS M&A volumes have stabilised since the mid-2022 peak and remain well above pre-pandemic levelsEUROPEAN SAAS M&A DEAL ACTIVITYEuropean SaaS M&A deal volume727659
67、1202176157Q1-19Q2-19Q3-19Q4-19Q1-20Q2-20Q3-20Q4-20Q1-21Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23Q3-23European SaaS M&A disclosed deal value2020:315 deals2021:595 deals2022:901 dealsYTD-23*:535 deals2020$52.0bn2021$39.5bn2022$16.8bnYTD-23*$15.0bn$8.8$2.2$30.0$3.8$1.8$0.6$1.3$48.3$7.7$8.7$13.1$10.
68、0$4.6$6.5$1.1$4.6$6.9$5.2$2.8Q1-19Q2-19Q3-19Q4-19Q1-20Q2-20Q3-20Q4-20Q1-21Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23Q3-23(#)($bn)M&ASources:GP Bullhound Insights and DealRoom(Q1 2019 Q3 2023)Note:*YTD represents 1 January30 September 20232019:252 deals2019$44.7bnQtrlyMean:137 QtrlyMean:$8.8bn Tot
69、al disclosed deal value in 2023 YTD($15.0bn)surpassed the equivalent period in 2022($12.2bn)a 23%increase.This was driven in part by several larger-value deals,including:Concentrixs merger with Webhelp for$4.8bnSilverlakes buyout of Software AG for$2.8bnEdenreds$1.4bn acquisition of Reward GatewayEU
70、ROPEAN SAAS DEAL ACTIVITY5%4%33%3%2%3%9%63%10%11%30%85%85%83%60%20022YTD-23Mega deals have historically dominated the market,with c.90%of European SaaS deals attributable to transactions above$1bn in 2019 and 2020.However,the share of the total value from mega deals has declined since 202
71、1,comprising only c.66%of the 2023 YTD deal value.With the exception of 2020,private equity deals have been heavily weighted towards mega deals(60%85%of any given year).However,it is worth noting that there has been an increased volume of take-privates,which command sizeable valuation premiums.Priva
72、te equity activity has also been fuelled by record levels of dry powder(global dry powder was c.$2.5tn as of July 20231).After a somewhat muted 2022,larger strategic buyers are back in full force in 2023,with the share of strategic M&A value coming from larger deals increasing more than two-fold fro
73、m 31%to 69%,indicating a resurgence in strategic buyer activity.While SaaS mega deals have historically dominated the market,they comprised only 2/3 of deal value in 2023EUROPEAN SAAS M&A DEAL ACTIVITY BY SIZEEuropean SaaS deal value 2019-2023 YTD*(%of total)$4.1bn2023 select transactions 100m-250m2
74、50m-1,000m1,000m+0m-50m50m-100mM&ASources:GP Bullhound Insights and DealRoom(Q1 2019 Q3 2023)Note:*YTD represents 1 January30 September 2023 1 S&P Global Market Intelligence$7.9bn$13.5bn$1.0bn$9.3bn9%4%12%7%1%2%6%20%7%4%5%30%27%13%92%91%58%31%69%20022YTD-23Strategic BuyersPrivate Equity$1
75、0.9bn$8.9bn$26.0bn$51.0bn$35.4bnDeal size:$4.8bn$4.8bnBPO and CXDeal size:$2.8bn$2.8bnEnterprise SaaSDeal size:$1.8bn$1.8bnEmployee Engmt.Deal size:$1.2bn$1.2bnEnterprise SaaSEUROPEAN SAAS DEAL ACTIVITYIn YTD 2023,the UK has maintained the title of most active market for SaaS M&A transactions but co
76、ntinues to decline as a share of overall deal volume(in our last report,the UK represented 29%of total activity while only comprising 23%this year).Overall,European deal volume across Q1Q3 2023 has declined by 25%compared with the same period in the prior year,driven by large declines in the top thr
77、ee markets:United Kingdom(31%decline)France(27%decline)Germany(20%decline)Of the top five European markets,only Sweden experienced growth in deal activity,increasing 72%between 2022 YTD-equivalent and 2023 YTD.UK,France and Germany comprise close to half of total European SaaS M&A volumesEUROPEAN SA
78、AS M&A DEAL ACTIVITY BY COUNTRYEuropean SaaS M&A transactions(%of deal volume)Rest of Europe(26.2%)Growth22/23 YTD36.9%23.0%13.0%12.4%8.1%6.2%UK(30.9%)Growth22/23 YTDFrance(26.5%)Growth22/23 YTDGermany(19.5%)Growth22/23 YTDSweden72.0%Growth22/23 YTDNetherlands(44.1%)Growth22/23 YTDYTD-23*Total deals
79、:276276Growth 22/23 YTD*:(24.7%)M&ASources:GP Bullhound Insights and DealRoom(Q1 2019 Q3 2023)Note:*YTD represents 1 January30 September 2023EUROPEAN SAAS DEAL ACTIVITYFundraising volume has experienced a decline across 2023 YTD,with Q3 2023 falling by over 60%since the Q2 2022 peak and every quarte
80、r in 2023 sitting below the pre-Covid levels(2019)of c.1,000 deals per quarter.However,when excluding deals below$15m,there have been an average of 71 fundraises per quarter across 2023 YTD,notably above the average of 51 and 60 deals in 2019 and 2020,respectively.This indicates that larger rounds h
81、ave become more frequent in the post-pandemic landscape.Despite declining volumes of SaaS fundraising activity,overall deal value remains above pre-pandemic levelsEUROPEAN SAAS PRIVATE PLACEMENT DEAL ACTIVITYEuropean SaaS private placement deal volume European SaaS private placement deal value 2020:
82、4,589 deals2020$16.7bn2021$44.9bn2022$46.8bnYTD-23*$14.2bn1,2691,0651,0341,0441,3369721,0931,1881,6411,4201,4781,5121,5651,7081,3971,349960890616Q1-19Q2-19Q3-19Q4-19Q1-20Q2-20Q3-20Q4-20Q1-21Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23Q3-23$3.7$3.8$5.0$3.1$3.9$3.6$4.1$5.0$8.5$14.2$11.8$10.5$17.2$14.
83、5$8.1$7.0$4.1$5.7$4.4Q1-19Q2-19Q3-19Q4-19Q1-20Q2-20Q3-20Q4-20Q1-21Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23Q3-232021:6,051 deals2022:6,019 dealsYTD-23*:2,466 dealsPRIVATE PLACEMENT(#)($bn)Sources:GP Bullhound Insights and DealRoom(Q1 2019 Q3 2023)Note:*YTD represents 1 January30 September 202320
84、19:4,412 deals2019$15.5bnQtrlyMean:1,239 QtrlyMean:$7.3mIndeed,while deal volume has been depressed,deal value has proved resilient against the pre-Covid benchmark of$4bn$5bn per quarter and just below the long-term average of$7.3bn per quarter.This further indicates a more mature European SaaS ecos
85、ystem and an increasing share of later-stage rounds.EUROPEAN SAAS DEAL ACTIVITYThe 2023 YTD fundraising profile is notably similar to the mix observed in 2020 and 2019,with a much larger weighting on smaller capital raises than mega deals(32%and 7%of value,respectively in 2023 YTD).This proves that
86、2021 and 2022 were clear outliers in market activity,driven by notably high valuations in the SaaS arena and technology more broadly.Excluding smaller raises($15m),which accounts for the majority of fundraise volume in each year,each band of volume and value in 2023 YTD has broadly reset to 2020 and
87、 2019 levels.2023 YTD SaaS fundraising split by deal size has reverted to pre-Covid trends across both volume and valueEuropean SaaS Private Placement volume&value 2019-2023 YTD*PRIVATE PLACEMENTSources:GP Bullhound Insights and DealRoom(Q1 2019 Q3 2023)Note:*YTD represents 1 January30 September 202
88、340m-100m100m-250m250m+15m-40m68%67%52%56%66%25%25%27%26%23%5%7%15%14%10%2%1%5%4%1%20022YTD-23Volume(excl.$15m)213 raises559 raises492 raises241 raises205 raises2023 select transactions 36%36%20%21%32%21%22%13%16%23%19%21%18%17%20%12%15%24%23%18%12%5%26%23%7%20022YTD-23$14.2bn$
89、46.8bn$44.9bn$16.7bn$15.5bnValue40m-100m100m-250m250m+0m-15m15m-40m2023 select transactions Deal size:$250m$250mApp DevelopmentDeal size:$175m$175mTravel TechDeal size:$120m$120mE-Commerce SW.Deal size:$129m$129mDecision Intel.EUROPEAN SAAS PRIVATE PLACEMENT DEAL ACTIVITY BY SIZEEUROPEAN SAAS DEAL A
90、CTIVITYThe UK,Germany,and France accounted for nearly half of all fundraising activity in the European SaaS ecosystem in YTD 2023 but have also all experienced significant declines across the year.Of the most active European markets for fundraising,the United Kingdom was the hardest hit,decreasing b
91、y 55.8%YoY,with most other geographies decreasing by c.20%50%.In fact,there were only two countries to experience an increase in deal activity between 2023 YTD and 2022 equivalent:Portugal,which has fostered 63 fundraises thus far in 2023(compared with 47 in 2022),and Bulgaria.The UK,Germany and Fra
92、nce have all experienced a decline in fundraising volume of c.50%in YTD 2023European SaaS private placement volume(%of deal volume)Rest of Europe(44.2%)Growth22/23 YTD41.7%22.9%13.0%8.8%7.2%6.3%UK(55.8%)Growth22/23 YTDGermany(44.9%)Growth22/23 YTDFrance(54.0%)Growth22/23 YTDSpain(39.2%)Growth22/23 Y
93、TDNetherlands(22.0%)Growth22/23 YTDYTD-23*Total deals:2,4602,460Growth 22/23 YTD*:(47.2%)PRIVATE PLACEMENTSources:GP Bullhound Insights and DealRoom(Q1 2019 Q3 2023)Note:*YTD represents 1 January30 September 2023EUROPEAN SAAS PRIVATE PLACEMENT DEAL ACTIVITY BY COUNTRYEUROPEAN SAAS DEAL ACTIVITYRefle
94、ctive of deal volume,the vast majority of deal value in the European SaaS market has been driven by the UK(32%),Germany(16.0%)and France(14.8%).While the decline in deal volume has been significant,the decline in deal volume has been even greater,with four of the top five regions decreasing by over
95、60%,which is unsurprising given the complete shift in macroeconomic conditions between 2023 YTD and its comparative period in 2022.UK represents nearly one third of all European SaaS fundraising value in 2023 YTDEuropean SaaS private placement value(%of deal value)UK(66.6%)Growth22/23 YTD31.8%16.0%1
96、4.8%5.1%3.6%28.7%Netherlands(61.8%)Growth22/23 YTDGermany(60.0%)Growth22/23 YTDNetherlands(20.6%)Growth22/23 YTDFrance(68.0%)Growth22/23 YTDRest of Europe(65.3%)Growth22/23 YTDEUROPEAN SAAS PRIVATE PLACEMENT DEAL ACTIVITY BY COUNTRYYTD-23*Total:$14.2bn$14.2bnGrowth 22/23 YTD*:(64.3)%(64.3)%PRIVATE P
97、LACEMENTSources:GP Bullhound Insights and DealRoom(Q1 2019 Q3 2023)Note:*YTD represents 1 January30 September 2023Terminology2023 EUROPEAN SAAS SURVEYKey SaaS metricsTerminologyTERMINOLOGYCustomer acquisition cost(CAC)Consists of all the sales&marketing expenses(staff and non-staff costs)spent to ac
98、quire one new customer CACCAC=S&M Expenditure#of new paying customersGross revenue retention(GRR)(%)Number of customers retained in a given period or cohort regardless of account expansion or growth 1 (Opening ARR downsell churnOpening ARR)ARR measures the amount of annually recurring revenue,or the
99、 sum of all revenue derived from customer contracts over the course of the next 12 months;can serve as an estimate for the size of a business Net revenue retention(NRR)(%)Number of customers gained or lost in a given period or cohort after taking into consideration new,reactivated,or expanded accoun
100、ts1 (ARR beginning of period+upsell churn downsell)ARR beginng of period)Payback period represents the time(months)taken to fully pay back sales and marketing investments involved in the acquisition of a new customerLTV is a measure indicating the total value of a customer expected over its lifetime
101、Payback periodAnnual Recurringrevenue(ARR)Life-time Value(LTV)Typically calculated on a cohort basis,excluding customers in trial periodsTypically calculated on a cohort basis,excluding customers in trial periodsSource:GP Bullhound InsightsAbout GP Bullhound2023 EUROPEAN SAAS SURVEYGlobal presence a
102、nd local expertise for a seamless service1999150+14640+$39bn+$800m+YEAR FOUNDEDPROFESSIONALSOFFICE LOCATIONSSUCCESSFUL TRANSACTIONSTRANSACTION VALUE ADVISED ONAUM ACROSSGP BULLHOUND MANAGED FUNDSNew YorkSan FranciscoMalagaMadridParisLondonManchesterStockholmZurichBerlinMunichLuxembourgFrankfurtAMERI
103、CASEUROPEUNITED KINGDOMMarbella2023 EUROPEAN SAAS SURVEYExtensive experience in software with strategics and financial sponsorsStrong global software track recordSOFTWARE EXPERIENCEACQUIRED BYFeb-22INVESTMENT BYAngelAngelPondPondHoldingsHoldingsINVESTMENT BYINVESTMENT BYACQUIRED BYACQUIRED BYACQUIRE
104、D BYACQUIRED BYACQUIRED BYACQUIRED BYACQUIRED BYACQUIRED BYINVESTMENT BYINVESTMENT BYACQUIRED BYINVESTMENT BYACQUIRED BYMERGER WITHACQUIRED BYINVESTMENT BYACQUIRED BYACQUIRED BYACQUIRED BYACQUIRED BYINVESTMENT BY2023 EUROPEAN SAAS SURVEYGP BullhoundsEuropean SaaS report teamAlexis ScorerAlexis Score
105、rPARTNERAlexis.SOliver ConnickOliver ConnickASSOCIATEOliver.CRobbie LenigasRobbie LenigasANALYSTRobbie.L2023 EUROPEAN SAAS SURVEYDisclaimerNo information set out or referred to in this communication shall form the basis of any contract.The issue of this insights report(the“report”)shall not be deeme
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