A status update.
Business software companies made up 30% of the value of European tech in 2022, at $1.1tn out of a total tech value of $3.7tn, an increase from 18% of the total the year before ($714bn out of $3.9tn total value). A number of factors may be at play here, including the relative stasis of value in European tech overall, and a rapid unrealised growth in business software valuations.
Value of European business software companies by company valuation
Source: Notion Capital, Dealroom, 2024
As of 2023, business software marginally increased its share of value in the European ecosystem, rising to $1.2tn, with European tech in aggregate staying at the same value.
Companies founded between 2015 and 2022 are contributing the lion’s share of value to the European business software ecosystem, representing 49.5% of value
Value of business software companies by launch year
Source: Notion Capital, Dealroom, 2024
Business software investment bucked the downturn in the tech economy overall, with an increase of 7.4% to over $40bn in 2022, while European tech as a whole saw a drop of nearly 19% - that decline persisted over 2023 - with a further drop in investment of 36%
But, investment has been disproportionately hard hit over 2023, after bucking, or seeing a delayed effect in previous periods of tech investment retrenchment. Investment into business software firms decreased by 59% - more than the rest of European tech, from 2022 to 2023.
(1) All tech investment in Europe
(2) Business software investment in Europe
Source: Notion Capital, Dealroom, 2024
Business software exits have held strong in value and volume in 2023, with notable acquisitions including Webhelp (France, $4.8bn), and Reward Gateway (UK, $1.5bn)
(1) Value of exits of European business software companies
(2) Number of exits of European business software companies
Source: Notion Capital, Dealroom, 2024