top of page

Phil’s European SaaS Musings – Winter 2023-24

Welcome to the Winter ’23 – ‘24 edition of my European SaaS Musings! I’ll cover some of the game-changing need-to-know’s in the European SaaS world. You can expect opinionated commentary and data on the public markets, macroeconomics, and the most interesting, notable and exciting VC rounds in European SaaS.


To receive the next European SaaS Musings in your inbox, subscribe to the Oxx newsletter (the subscription form can be found in the footer at the bottom of the page).



1) What’s going on in the public markets?

This time – I’ll start by zooming out to take a look at the remarkable movements in the global stock markets (more broadly than software).


The Economist recently published a piece showing the scale and breadth of the recent stock market rally: “everywhere you look, stock markets are breaking records”. The MSCI world stock market index has just hit an all-time high, propelled by major movements in the US, Europe and Japan; exceeding the 2021 peaks. To me this feels weirdly dissonant with how many are experiencing the real economy.

Zooming out on a very long timeline (looking at a popularly tracked measure of relative valuations) they look at Shiller’s cyclically adjusted price / earnings. Charted back for the last ~150 years(!) it’s clear to see that the current levels are certainly on the high side. If you squint – you can see that the latest data doesn’t quite hit the highs seen in 2021 on a relative valuation basis, but they still remain higher than any time other than the dot-com crash (and notably are higher than the 1929 pre-crash peaks).

Atop the mountain
Hype for the best


Unless you’ve been living in a cave, you’ll know that a lot of this is AI driven excitement. The poster-child of this movement is NVIDIA, who every day is printing simply astonishing numbers. You can pick from a feast of superlatives and examples here, but some of my favourites are the below from Bobby Molavi at Goldman Sachs:


Two years ago the S&P energy sector was 5x the size of Nvidia – today Nvidia is bigger than all the energy stocks in the S&P 500 combined, helping Tech to now stand at 30% of the S&P 500, while energy has fallen to just 4%.


On October 31st 2023 Nvidia had a market cap of $950bn. Since then the stock is up ~80% and hit an all time high of ~$1.7 trillion. It added $750bn of market cap in 70 day (or around $10.7bn a day ever day for those 70 days) for a grand total worth the combined market caps of ASML, L’Oreal and Siemens… in just 70 days.


Nvidia overtakes Amazon and Alphabet


How much are markets pricing in the AI optimism? Jordan Brooks of AQR Capital Management said “a repeat of the past decade’s equity market performance would require a heroic set of assumptions”. By this, he means US real earnings would need to grow at 9% a year. A feat only twice achieved in the post-war period. It’s a bit of a coin toss for me whether the massive AI-driven productivity improvements will indeed facilitate this level of step change, or if they require longer to propagate through the economy.


Now – focusing our lens on SaaS specifically, We see the EMCLOUD index up 26% YoY, a shade faster than the Dow, but slower than the overall S&P and NASDAQ. Relative performance since the trough around Halloween has been strong, with the index up around 30% in the last 4 months, about the same rate as the NASDAQ and outpacing the Dow and S&P.

Emcloud index performance

The valuation picture also mirrors that of the overall market, comprising robust EV / ARR multiples, particularly for the subset of businesses that are demonstrating >30% YoY ARR growth. There are currently 10 public businesses with EV / ARR multiples >15x. 4 of these businesses (Crowdstrike; Palantir; MongoDB and Samsara) have also more than doubled their share prices in the last 12 months.


Underpinning this is more and more evidence of a recovery in revenue and expectations in the software world. A good predictive indicator of this is looking at the performance of the cloud giants (Google, Amazon, Microsoft). Jamin Ball at Altimeter reports the clear theme is the period of workload / cost optimisation is over, and all 3 are seeing the impact of new initiatives and migrations, being heavily AI driven.


In this great 9 panel visual, we can see growth rates ticking up in Q4 for all 3; but most interestingly I felt was the $ value of net new ARR for Azure and Google Cloud being noticeably higher than any quarter in the last few years. If you're looking for some reasons to be optimistic, this is a good place.

Jamin Ball at Altimeter

And there's potentially more good evidence of growth and efficiency improving outside of the cloud giants. David Spitz at Benchsight looks at the GTM Spend Ratio (i.e. sales and marketing spend divided by net new ARR); which based on the 29 businesses that had reported by the time he published, appeared to have turned the corner and begun the slow drift back towards historic levels. Worth cautioning this is a partial sample – and whilst the movements look quite well correlated vs the full sample set of public companies, the yet to report businesses could skew this and muddy the picture.

Median GTM spend ratio for public SaaS

But looking at broader measures of financial performance, it’s hard to infer how the healthy the other KPIs are in the public SaaS set. David Spitz tracks a detailed table of reported NRR for public companies; with the median at 120% in Feb ’23; 116% in Aug ’23 and 113% in Dec ’23. Based on this – it’s pretty inconclusive whether we’re likely to see more downward momentum, or if we’ve already hit the nadir.


2) A soft landing for global growth; except the UK...  


The UK’s macro environment has been struggling considerably more than peers; with sluggish growth and stubbornly high inflation. The charts below from the Economist clearly show the extent of the differences vs the US and Euro area.

Spot the laggard


The US' unexpectedly strong growth, which surprised many economists (including the IMF) has underpinned strong global growth. The Chief Economist of the IMF, Pierre-Olivier Gourinchas, said (per Reuters) that "a 'soft landing' was in sight, but overall growth and global trade remained lower than the historical average".

If anyone was in any doubt regarding what was propping up the US economy, I thought the below was succinct:

US economy supported by Nvidia and Taylor Swift

The Carta treasure trove of data published the below infographic showing net hiring across the 40k startups on their platform, looking at the net total of new hires, layoffs and voluntary departures. The consequence of a prolonged hiring slowdown, high levels of layoffs, and steady voluntary departures means that for most of 2023, startups weren’t net hirers, and up until September last year when this was published, there aren’t yet signs of improvement. To the extent this isn't just localised in Tech, it will have contributed to bringing inflation back under control and supporting those who viewed the peaks as transitory.


Startups stopped growing headcount


Finally, 2024 is being lauded as the biggest year for elections ever. The Economist reports that in 2024, countries with more than half the world's population - over 4bn people, will vote for their new government. 76 countries in total are scheduled to hold these elections, including 43 of the 71 covered in the EIU's Democracy index - which will enjoy 'fully free and fair votes'. The outcome of these will drive policy changes, and undoubtedly become a key driver of the real economy and financial markets.


3) A slow year for mid-to-late stage venture deals


Now we’ve moved into 2024, it’s clear 2023 represented a very dramatic cooling in the European venture market (as it did globally). We generally review about 100 scale-up stage B2B SaaS rounds happening each quarter on average across Europe and Israel ($5-30m equity rounds in B2B SaaS businesses that are named Series A – C rounds). The below chart shows very clearly that 2023 had the lowest volume of transactions in this space, each quarter, since pre-2019.

Deal Count

Source: Oxx Analysis, Dealroom data (2024).


There’s also typically a further 50 B2B SaaS rounds per quarter that happen, with the same fundraising parameters, but are not named “milestone” A-C rounds. This can include typical smaller “Growth Equity” transactions, but also is the most typical labelling for internal follow on, or “Bridge” style financing rounds.


Below we show a chart of the rolling 3 month total deal count per transaction type. It’s a bit of a noisy dataset, but I’ve kept the moving average at 3 months to try to spot early signs of any pattern. It looks like the ‘other’ bridge rounds and Series A’s have held pretty steady in 2023, as have the Series C’s (that are a small subset of all C rounds, as here we only look at <$30m rounds). Series B’s have seen a steady downward trend since mid-21, which we expect to reverse through 2024.

Rolling Quarterly deal count

  Source: Oxx Analysis, Dealroom data (2024).

Against this backdrop, it’s particularly important to reflect on the businesses that have had strong raises during the quarter.


Below are my top European SaaS Deals announced between Sept – Dec 2023. Congratulations to the companies raising - some great businesses and rounds here! If there are any other companies and rounds you think I should have included, LMK.

Rounds Q3 2023


4) Thanks for reading!

I hope you enjoyed reading this winter update. If you have any feedback, please do reach out (; all comments or recommendations are welcome.

If you want to receive the next European SaaS Musings in your inbox, subscribe to the Oxx newsletter by filling in the subscription form in the footer.


The contents of this newsletter are for informational purposes only. Such information contained herein are the author’s alone and are not intended to constitute an offer, solicitation, recommendation or advice to purchase any security or any investment product or service. The information should not be relied upon for legal, accounting or tax advice or investment recommendations. Any reproduction or distribution of the information in this newsletter, in whole or in part, or the disclosure of its contents to any person other than to a professional adviser is prohibited without the prior written consent of Oxx Ltd. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness, or completeness of this information. Oxx Ltd and all employers and their affiliated persons assume no liability for this information. Such information, opinions and images are subject to change and Oxx Ltd has no obligation to update the information contained in this newsletter. Recipients should make their own determination as to whether a particular investment opportunity is suitable for their investment needs or should seek such professional advice before making any investment decision.


bottom of page