Business software investment bucked the downturn in the tech economy overall, with an increase of 7.4% to over $40bn from 2021 to 2022. European tech as a whole saw a drop of nearly 19% over the same period.

Venture capital investment ($bn) into all European tech companies (left) and European Business Software tech companies (right)

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).

The value of European Business Software startups jumped from $712bn in 2021, to $1.2tn in 2022, while in the US value dropped by 12% from $4.2tn to $3.7tn, before regaining that lost value in 2023. 

Total valuation ($bn) by company value of US (left) and European (right) Business Software companies

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Business software employment in Europe has held at 2.8mn from 2022 to 2023, following an increase of 27% from 2021. In the US, employment has steadily increased year on year since 2018, reaching 6.3mn people in 2023.

Looking forward, based on current trends, we would expect to see employment increase to over 6mn people in European business software by 2030 - this is more than total UK tech employment today, which sits at just below 5mn people.

Employment in European Business Software companies by year, by valuation of company

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The vast majority of employment in European business software is currently in companies below $200mn in value (86%). This is likely to shift to resemble US employment distribution in coming years, as the ecosystem continues to mature, and around 30% of employees are in companies valued over $200mn (so called future unicorns, unicorns, and decacorns).

Business software is an evolution from B2B SaaS and Cloud

Business software takes into account emerging technologies such as AI, quantum, and blockchain and their impact on our areas of business software focus, which include:

• future finance, 
• industry OS, 
• cloud computing, and 
• modern enterprise 

The European Business Software Report helps you to understand the headwinds, and tailwinds to continued growth in this area, through increasingly turbulent economic times. 

To read more, download the report below.

Stay tuned for an update to this report every six months to catch the latest developments and trends in European Business Software.