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.
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.
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.
Industrial digitalisation in Europe is entering a new phase that is centred on process automation and intelligent management. Various industries – from manufacturing and energy to transportation and infrastructure – are using SaaS platforms to enable digital tracking and to audit production and operational processes. Based on research by Reichelt Elektronik, about 41% of European industrial companies have achieved partial process automation, and about 60% expect further automation over the next five years. This trend drives demand for system-based solutions capable of maintaining compliance and auditability in complex operational environments. In this context, SaaS is emerging as the primary technological vehicle for digitalisation.
The integration of AI further expands the functional scope of SaaS solutions. EU statistics show that in 2024, only around 13.5% of enterprises applied AI in production or management – an increase of about 5% compared with 2021. Although overall AI adoption remains limited, investment is growing rapidly. According to Silicon Valley Bank, AI-related funding in Europe exceeded $13 billion in 2024, with year-on-year growth of more than 20%. AI-enhanced SaaS systems can now support intelligent use cases such as production monitoring, quality tracking, energy-consumption forecasting, and supply-chain risk alerts, helping enterprises optimise processes and improve audit capabilities within increasingly complex regulatory environments.
At the same time, regulations such as the EU AI Act and the Data Act are establishing compliance boundaries for the use of AI. High-risk AI systems must meet stringent requirements around risk management, data governance, human oversight and transparency. This has two key implications: while AI can enhance SaaS to deliver powerful efficiency tools, their convergence also creates a new layer for executing compliance within the regulatory framework. In Europe’s complex, regulation-dense industrial landscape, AI is becoming a technological extension of SaaS – supporting both automation and robust risk control.