27.1.2025
Our quarterly SaaS valuation insights report focuses on the Translink SaaS Index (”TSI”), offering a comprehensive analysis of index constituents, SaaS M&A trends, and the wider European SaaS market. This update aims to deliver our primary insights and observations concerning the mid-market SaaS valuation landscape in Q4/2024.
Distinguishing itself from other comparable indices, TSI primarily comprises small to mid-sized public SaaS companies in the Nordic and European regions. It includes 128 companies, with 41% headquartered in the Nordics, 22% in other parts of Europe, 30% in the United States, and roughly 7% in other global markets. Importantly, our index intentionally excludes large and mega-cap SaaS companies.
We firmly believe that our proprietary index serves as a valuable benchmark for assessing the valuations of small and mid-sized SaaS firms, which are typically the focus of transactions within our core European markets.
SaaS valuation insights report excerpts
Compressed SaaS multiples primarily due to sluggish growth: SaaS valuation multiples have remained close to their two-year averages, with Nordic public valuations showing little movement since Q3/2022. The median EV/LTM Sales multiple for the TSI is currently 3.3x — a figure that reflects underlying challenges, as 70% of TSI constituents reported year-over-year growth below 20% in Q3/2024. Since the figures also account for expansion, they underscore relatively weak and declining overall performance. However, as detailed in this report, aggregate benchmarks provide only a high-level view of the market and sentiment and should not be used as a basis for private company valuations.
Fewer “high performers” are pulling down aggregate EV/Sales multiples in absolute terms, while profitability takes a larger role in the Rule of 40 metric: As highlighted in previous reports, the performance gap between low and high performers continues to widen, with profitability taking priority over growth as the primary factor influencing Rule of 40 figures. This trend remains largely consistent with our findings from the Q3/2024 report.
In Q4/2024, vertical SaaS companies were valued 70% higher than their horizontal counterparts, up from a 40% premium in Q3/2024, despite both groups having nearly identical median Rule of 40 metrics: Over the past two years, valuations of public vertical and horizontal SaaS companies in our index had been steadily converging. However, Q3/2024 marked the first time since H1/2021 that vertical SaaS valuations significantly surpassed those of horizontal SaaS—a trend that continued through Q4/2024.
In 2024, both deal volume and transaction multiples experienced a slight decline compared to 2021–2023: Approximately 300 SaaS transactions were completed in the Nordics in 2024, with a median EV/Sales multiple of 4.2x, down from around 360 transactions at 4.7x in 2023. Looking ahead, we expect 2025 to be an active year for M&A activity as sponsors face increasing pressure to pursue exits, while stabilizing performance and pricing, combined with narrowing bid-ask spreads, create a more favorable environment for transactions.
Fundamentals remain largely consistent: exceptional companies continue to command high valuations. Our analysis of 2024 transaction data, including private and public-to-private deals across the region, confirms that while there is an intensified focus on business fundamentals—such as cash flow profiles, capital efficiency, and tangible synergies—the core dynamics remain unchanged. High-quality assets are still transacting at high single-digit and double-digit multiples, but only when backed by a compelling business case, strong growth, a clear path to sustainable margins, and robust customer retention. Shifts in market sentiment have disproportionately impacted weaker and mediocre performers, while stronger companies remain resilient.
SaaS trends in 2024
Public Takeovers: In 2024, buyers demonstrated a willingness to pay substantial premiums for Nordic public SaaS companies, underscoring the persistent valuation gap between public and private markets. The year saw a notable number of public takeovers across the Nordic region, including Thomson Reuters’ acquisition of Pagero Group (Sweden), Visma’s acquisition of Penneo (Denmark), and Matrix42’s acquisition of Efecte (Finland). The median takeover premium in Nordic SaaS public deals was around 90%, significantly higher than the overall median.
Investor Activity: Competition for Nordic SaaS targets is intensifying as the industry matures and attracts new entrants. Since 2020, the number of unique investors in Nordic SaaS companies has steadily increased, with many newly established firms actively seeking opportunities in the region. Notably, 2024 saw about a handful of software aggregators making their first investments. According to our data, Main Capital Partners led the market in 2024 with three new platform investments in the Nordics, followed by Adelis Equity, Copilot Capital, Gro Capital, and Viking Venture, each making two new platform investments during the year.
Significant VC and Growth Equity Investments in 2024: Hostaway, a leading vacation rental software platform supporting properties in over 90 countries, secured a USD 365 million growth investment from General Atlantic in 2024. This follows a USD 175 million investment from PSG in 2023. The Hostaway success story highlights the rapid scalability of B2B SaaS companies when backed by the right combination of team, product, distribution, and support.
Global SaaS IPOs: The top global SaaS IPOs of 2024 were well-received, laying the groundwork for increased activity in 2025, assuming rate cuts persist, and economic conditions remain favorable. Since the peak of 2021, IPO activity has been subdued, with leading tech giants opting to stay private longer and providing liquidity to early investors through secondary market transactions rather than public offerings—a trend likely to continue. However, financial sponsors managing companies outside the ”super scaler” category face mounting pressure to return capital to investors. While we anticipate a resurgence of tech IPOs in the coming years, it’s likely we’ll see smaller companies testing the waters first before larger players commit to public listings.
Download our SaaS valuation insights report
In our quarterly SaaS valuation insights report, we strive to provide an overview of the latest developments and trends related to valuations accompanied with our proprietary insights and learnings from live projects and observations from engaging with both clients, strategic buyers, and investors in our cross-border advisory practice.
The full SaaS valuation insights report can be downloaded by clicking the link below, and the report will also be published on our website on a quarterly basis.
Tero Nummenpää, Partner
Ruben Moring, Partner
Juuso Marttinen, Partner