European SaaS Report 2025

GP Bullhound has released its fourth annual European SaaS report, delivering a comprehensive update on the sector’s performance metrics, deal activity, and public market valuations.

Drawing on benchmarking data from over 100 private European SaaS companies, the report evaluates critical performance drivers, including growth rates and operational efficiency. It also explores public market valuation trends, fundraising, and M&A activity, offering quarterly breakdowns and country-specific insights.

Alexis Scorer, Partner at GP Bullhound, commented: “This year’s survey highlights the continued focus on disciplined and efficient growth. We are seeing healthy topline performance – particularly among companies with sub-€25m and €50m+ ARR. Operational efficiency continues to improve, and a growing majority of companies we surveyed are now EBITDA positive. Against the backdrop of a resilient fundraising environment, alongside a more selective but active M&A market, European SaaS companies are well-positioned to explore a broader range of strategic options and benefit from the anticipated pick-up in deal activity throughout 2026.”

GP Bullhound European SaaS survey key takeaways:

• Growth stabilizing and continues to accelerate amongst certain cohorts. Sub-€25m and €50m+ ARR companies continue to deliver the highest growth, while the €25-€50m cohort has seen the weakest performance relative to last year.

• Productivity continues to improve for mid-sized SaaS. ARR per FTE has improved further for companies between €5m–€50m ARR, while remaining comfortably above pre-2022 levels for larger businesses.

• Net Revenue Retention expanding for enterprise SaaS despite growing divergence across segments. NRR has softened for SME-focused companies and mixed SME/Enterprise models, while improving for Enterprise-focused vendors; however, overall retention is still above 100%.

• Gross margins remain stable and broadly in line with previous years. Median gross margins across ARR cohorts remain in the mid-70s to low-80s with mixed movements by sector.

• Majority of surveyed SaaS companies are now EBITDA positive. Profitability continues to improve, with 57% of respondents EBITDA positive, up from the mid-40% range last year.

Public Market European SaaS:

• European SaaS valuations trade at a material discount to US peers. European listed SaaS companies now trade at around ~6x forward revenue vs. ~7.2x for US peers, despite broadly comparable EBITDA margins, with the gap driven primarily by stronger growth expectations in the US.

• Continued improvement in EBITDA margins. Average EBITDA margins in the index have stepped up to the high-20s, with most companies generating margins above 20%.

European SaaS Deal Activity:

• Modest pull back in M&A activity in 2025 YTD. SaaS M&A volumes declined in 2025, with quarterly deal counts falling below the long-term average; YTD-25 reflecting a more cautious M&A environment

• Resilient fundraising environment with fewer but larger Deals. Fundraising in 2025 YTD remains well above long term quarterly averages despite decline in transaction volumes.

Enquiries
For any enquiries, please contact:

Alexis Scorer, Partner, at alexis.scorer@gpbullhound.com
Ben Pittari, Managing Director, at ben.pittari@gpbullhound.com

For press inquiries, contact: press@gpbullhound.com.

About GP Bullhound
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and capital to the world’s best entrepreneurs and founders. Founded in 1999 in London and Menlo Park, the firm today has 11 offices spanning Europe, US and Asia. For more information, please visit www.gpbullhound.com.