European Software Trends & Multiples 2025

The European software ecosystem is stabilizing in 2024-2025, transitioning into a more selective and
capital-efficient phase

Fundraising is projected to reach €11.9bn in 2025E, slightly above 2024 levels – despite a continued decline in deal volume to c.1,900 rounds, the lowest in six years. This confirms a market environment where capital is flowing to fewer, more resilient players.

In parallel, exit activity is accelerating, with a record 1,050 software M&A transactions projected in 2025.
However, total disclosed deal value is expected to reach €7.8bn, well below the highs of 2021, pointing to a market increasingly driven by smaller transactions. This reflects a wave of bolt-on and build-up acquisitions, particularly by private equity-backed platforms, rather than large flagship exits. North American acquirers remain dominant, accounting for the vast majority – a continuation of their longstanding interest in scalable European B2B SaaS.

From a sector perspective, FinTech retains the lead, but Security is rapidly gaining ground, driven by
heightened investor focus on defensible, regulation-related verticals. The AI-native wave continues to
redefine priorities, pushing median round sizes higher across Series B and C, and reinforcing the valuation premium for vertical SaaS platforms.

On the valuation front, VC entry multiples rebounded to 6.5x revenue, while exit multiples remain more
conservative at 1.8x, reflecting a market still dominated by sub-€50m transactions. Notably, bootstrapped companies still represent the majority of exits, often showing strong profitability but trading at lower multiples due to size and structure.

Overall, 2025 marks a turning point for European software: a market emerging

Arthur Porré, Managing Partner, October 2025