Europe’s SaaS Landscape: A Mature Market Entering Its Next Growth Phase

Key Insights

• More than 80% of European enterprises do not view GDPR as a negative factor, and the need for compliance is creating opportunities for SaaS providers.
  The European SaaS market offers high predictability, driven by the existence of a large number of regulatory frameworks present within Europe, from the General Data Protection Regulation (GDPR) and the Artificial Intelligence Act (AI Act), to the Network and Information Security Directive (NIS2) and the Digital Operational Resilience Act (DORA). The stringent regulatory environment acts both as a barrier to entry and a catalyst for continued demand for compliance-focused SaaS solutions. On the payments side, Antom leverages its regulatory expertise and broad payment coverage to support SaaS platforms with secure, locally compliant payment options.

• The European SaaS market is growing steadily, with enterprise SaaS spending per employee more than double the global average.
  The European SaaS market grew from USD 35.5 billion in 2020 to $104.2 billion in 2025, with a compound annual growth rate (CAGR) of 24%. Enterprise SaaS spending also grew significantly, as per-employee expenditure climbed from $87.7 to $248.8 – an increase of almost 184% and more than twice the global average of $115.7.

• European SaaS companies are performing strongly overall, and profitability is steadily improving.
  About 44% of SaaS companies achieved profitability in 2023, up from 33% in 2022. Mature companies with lower annual recurring revenue (ARR) growth recorded an even higher profitability ratio of 73%. Gross margins also remain strong: companies with ARR above EUR 50 million have seen margins rise to 80%, while mid-sized companies with ARR between €25 million and €50 million maintained margins at 77%. Furthermore, ARR per employee continues to rise, signalling a notable improvement in operational efficiency as companies scale.

• While Europe’s SaaS transaction activity has softened, it is moving towards greater rationality and stability.
  The number of disclosed transactions grew from 478 in 2020 to 619 by the third quarter of 2024. Meanwhile, disclosed transaction value reached $18.6 billion in Q1–Q3 2024, up from $16.4 billion in the same period in 2023. The share of large scale transactions has also increased, illustrated by Thoma Bravo’s acquisition of Darktrace for $5.3 billion – a clear signal that capital continues to favour companies with strong profitability and clear business models. At the same time, market expectations for SaaS companies are shifting away from scale expansion towards sustainable operations and stable profitability.

SaaS in Europe: a predictable and mature market

In the global software industry, Europe is often seen as a mature and conservative market – shaped by high saturation, strong regulation and steady growth. This very stability also makes it one of the most predictable regions worldwide. For SaaS companies considering expansion into Europe, this predictability is both a barrier and an opportunity. When regulation becomes a competitive hurdle, compliance needs can open up new business opportunities. Beneath Europe’s strict rules and well-established systems, companies are still actively pursuing new efficiency gains and fresh avenues for growth.

Compliance and data sovereignty form the foundation for regulatory certainty, allowing innovation to flourish

Regulation drives SaaS growth as compliance requirements become a new source of market returns

In Europe, market certainty is anchored in strong institutions, and trust is built through compliance. Decades of regulatory development have shaped one of the most structured digital economies in the world. From the General Data Protection Regulation (GDPR) and the AI Act to NIS2, DORA and other frameworks, Europe’s regulatory system spans virtually every aspect of data flows, algorithmic transparency, cybersecurity and financial operations. For businesses, these rules are not merely constraints but the institutional foundations that make participation in the market possible.

Within this environment, SaaS has become the primary technical path for achieving compliance and managing data sovereignty. SaaS systems offer traceability, upgradability and auditability, enabling companies to maintain ongoing compliance and adapt quickly to policy changes. Across financial services, manufacturing and energy, enterprises increasingly view SaaS as compliance infrastructure, with modules such as data encryption, access control, activity logging and risk reporting now central to procurement decisions. As a result, regulatory pressure is translating directly into standardised demand for SaaS, and compliance capability has become a prerequisite for market entry. Against this backdrop, it is critical for companies to choose ecosystem partners that meet European regulatory requirements and offer strong localisation capabilities. Trusted by leading marketplaces and e-commerce platforms, Antom provides secure, compliant payment solutions through local acquiring, integration with mainstream European payment methods, and SEPA and open banking connectivity. Antom supports most European payment scenarios while ensuring all processes adhere strictly to European data and financial regulations.

According to IMARC, the global GDPR services market reached around $3 billion in 2024 and is expected to maintain a CAGR of more than 20% over the next decade, with Europe accounting for the largest share. This reflects a growing acceptance of compliance costs among enterprises and a rising willingness to invest in trusted compliance systems. For SaaS providers, this shift is making “compliance as product” a reality, requiring features that embed data protection, compliance audits and risk visualisation directly into the software.

Research from Piwik PRO reinforces this trend: more than 80% of European enterprises do not view GDPR as a negative factor, and many believe it enhances customer trust and process standardisation. In Europe, compliance is not a constraint on innovation but its starting point. SaaS providers that can translate complex regulatory requirements into systematic, replicable software solutions are becoming the key beneficiaries of this market growth.