10 Biggest SaaS Companies in Europe

Published on August 11, 2022 at 9:05 am by Faiq Zafar in Lists, News

In this article, we shall go over the 10 biggest SaaS companies in Europe. If you want to skip our detailed analysis of the SaaS sector, go directly to the 5 Biggest SaaS companies in Europe.

According to McKinsey and Company, the global SaaS sector is currently worth over $3 trillion and according to estimates, the figure could very well climb to $10 trillion by 2030. The median growth rate of the top 100 public SaaS companies by revenue in the United States was 22 percent as of 2022, with the top quartile achieving mammoth growth percentages of 40 percent. The report also outlines reasons for the stunning performance of the SaaS sector, attributing its growth to its asset-light nature, lower overhead and logistical costs, ease of scale, the cloud’s extensibility and elasticity, and incentives in partnering with major cloud service providers to save traditional companies from carrying out technical work themselves. According to a recent market report by BusinessWire, the top countries in the world for SaaS companies are the United States, the UK, Canada, Germany, France, India and China.

The SaaS Sector in Europe: An Analysis

According to another report by McKinsey, in the past decade, owing to an increasing trend in digital behaviors fueled by the COVID-19 lockdowns, the software sector has achieved a growth rate that is twice that of the aggregate of all major industries. Whilst the global economy depreciated by 3.3 percent in 2020 compared to 2019, revenue in the SaaS sector boomed by 2.7 percent and is further predicted to grow at twice the rate of the global GDP in the next five years. However, the report also notes that SaaS has significantly eroded the strength of certain economies of the world, such as Europe. By September 2021, seven of the ten most lucrative companies in the world belonged to the SaaS sector, a glaring reflection of the rising economic importance of the industry. However, Europe has lagged behind these developments as only 7 percent of the 100 most valuable companies in Europe are software companies and as of today, not a single European company features on the list of the world’s ten most valuable software and software-enabled companies, and there are just three among the top 20.

Some of the biggest global players in the SaaS sector today are Adobe Inc. (NASDAQ:ADBE), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG). However, in this article, we shall only cover the 10 biggest SaaS companies in Europe by market capitalization as of August 1.

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Biggest SaaS Companies in Europe

10. AVEVA Group plc. (LSE:AVV)

Market Cap as of August 9: $8.35B

Based in Cambridge, England, AVEVA Group plc. (LSE:AVV) is a multinational information technology consulting company with a primary listing on the London Stock Exchange and is a component of the FTSE 1000 index. The company specializes in information technology, technology consulting, CAD/CAM software, enterprise solutions, and manufacturing execution systems.

‘AVEVA Connect’ is AVEVA’s (LSE:AVV) cloud-based SaaS platform which is a digital transformation hub for the industrial sector to drive and track innovation, growth and sustainability. It provides a single, secure cloud environment for all AVEVA solutions and digital assets, and is designed to span the entire business including engineering, design, and procurement to optimize operations. With over a 100,000 active users monthly, companies all around the world use the industrial cloud platform to connect their data and communities. Another cloud based SaaS platform offered by AVEVA (LSE:AVV) is AVEVA Flex, an industrial software subscription service which aids companies in the purchase, design and use of their industrial software.

With a total revenue of more than $1.4 billion in the first quarter of 2022, and over 6500 employees worldwide, AVEVA (LSE:AVV) is one of the leading names in industrial software and one of the biggest SaaS companies in Europe by market capitalization. The company is projected to grow 10.7% per annum for the next five years.

9. Wise plc. (LSE:WISE)

Market Cap as of August 9: $8.36B

Wise plc. (LSE:WISE) is a financial technology company based in London, UK. Formerly known as TransferWise, the global technology company operates in over 170 countries and through their application, users can send, spend, convert and receive money internationally, primarily from the United States to about 80 countries. Wise (LSE:WISE) provides a cost-effective alternative to banking systems, which tend to charge heavily to transfer money abroad. With a seed funding of almost $1.3 million, Wise (LSE:WISE) was named as one of “East London’s 20 hottest tech startups” by The Guardian in 2012. The company went public in July 2021 with a primary listing on the London Stock Exchange, being valued at $11 billion.

Wise’s (LSE:WISE) cloud banking application is subscribed to by over 13 million people and businesses in over 170 countries. Furthermore, as part of the company’s SaaS product suite, ‘Wise for Banks’ gives banks and other financial service providers the opportunity to offer customers a swift and transparent international money transfer experience, with the luxury of never having to leave the banking application. All transfers are carried out using the real exchange rate and charges the customer an upfront fee.

As of the first quarter of 2022, Wise (LSE:WISE) reported a total revenue of $677.1 million. The company is projected to grow 34.15% per year over the next five years according to analysts, making it a strong prospect to feature on the list of the 10 biggest SaaS companies in Europe. Like Adobe Inc. (NASDAQ:ADBE), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), it is also one of the largest SaaS providers in the world by market cap.

8. Clarivate plc. (NYSE:CLVT)

Market Cap as of August 9: $8.5B

Clarivate (NYSE:CLVT) is a British-American publicly-traded analytics company based in London, UK. It operates and owns a range of subscription-based services which provide solutions to bibliometrics, scientometrics, business/market intelligence, competitive profiling for pharmaceutical and biotech patents, and trademark protection. Founded in 2016, Clarivate (NYSE:CLVT) reported a total revenue of $1.88 billion in 2021. With over 11,000 employees, Clarivate (NYSE:CLVT), like Adobe Inc. (NASDAQ:ADBE), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), is one of the biggest SaaS companies in the world.

Clarivate (NYSE:CLVT) is highly regarded in the scientific community as one of the only companies in the world to calculate the impact factor, using data from its ‘Web of Science’ product family, which include subscription-based applications like Publons, EndNote and ScholarOne. Other product families include Cortellis, comprising of science-related intelligence software; Derwent, which is a database containing patent applications; and CompuMark, which includes information services used by brands and trademark professionals.

Baron Funds mentioned Clarivate (NYSE:CLVT) in their Q1 2022 investor letter. This is what they said:

“We reduced our stake in Clarivate Plc (NYSE:CLVT), an information services company focused on the scientific and academic markets, after the company reported particularly disappointing fourth quarter earnings results.”

Frequently raising anti-monopoly concerns, Clarivate (NYSE:CLVT) has managed to achieve stellar growth in a significantly short period of time through numerous acquisitions: in the 6 years since its inception, Clarivate (NYSE:CLVT) has acquired over a dozen companies, and in some cases, even bought companies in direct competition with each other.

7. The Sage Group plc. (LSE:SGE)

Market Cap as of August 9: $8.95B

Headquartered in Newcastle upon Tyne, England, The Sage Group plc. (LSE:SGE) is a multinational enterprise software company, and, as of 2022, is the UK’s second largest technology company, the world’s largest technology supplier to small businesses, and the world’s third largest supplier of enterprise resource planning software. The company has over 6.1 million customers and 13,400 employees in over 24 countries around the world. Sage (LSE:SGE) has dedicated its key industry focus on software development, cloud-based programming, and financial management.

‘Sage Intacct’ is an American subsidiary of Sage (LSE:SGE) which provides a cloud-based financial management SaaS application operating in five regions, including the US, the UK, Canada, Australia and South Africa. ‘Intaact’ automates most basic to complex accounting processes, offering multiple cloud-based accounting applications which enable businesses to manage and pay bills, cover costs and facilitate payroll functions. The application has a range of subscription-based accounting products which include accounts payable, accounts receivable, cash management, order management and much more. Furthermore, Sage (LSE:SGE) has also released add-on software applications for contract and subscription-billing, contract revenue management and fixed assets. It makes way for the integration of third-party software.

Sage (LSE:SGE) reported an annual revenue of $2.23 billion in the fiscal year of 2021, and a profit-to-equity ratio of 25.94 as of August 9. With growth estimates of 12.05% per year over the next 5 years, Sage (LSE:SGE) has cemented its place on the list of the 10 biggest SaaS companies in Europe.

6. Globant S.A. (NYSE:GLOB)

Market Cap as of August 9: $9.49B

Based in Luxembourg City, Luxembourg, Globant S.A (NYSE:GLOB) is an IT and software development company operating in 18 countries globally, most notably including the UK, the United States, Canada, India, Germany, and France. Founded in 2003 in Buenos Aires, the company relocated to Luxembourg. Globant S.A (NYSE:GLOB) specializes in software development, mobile application development, social network development and mainframe migration. With over 25,500 employees globally, and an annual revenue of almost $1.3 billion in 2021 , Globant S.A. (NYSE:GLOB), like Adobe Inc. (NASDAQ:ADBE), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), is one of the largest software and software-enabled companies in the world.

According to Globant S.A’s (NYSE:GLOB) official website, the company launched a new Services over Platforms (SoP) model to bring together the best features from the existing traditional professional services and SaaS models. Through this model, Globant S.A. (NYSE:GLOB) charges the SaaS portfolio by assigning a cost-per-user per month, per usage, or per transaction, depending on the type of platform, a move which resembles models occupied by other SaaS companies.

Baron Funds, an asset management firm, mentioned Globant S.A. (NYSE:GLOB) in their Q1 2022 investor letter, a copy of which can be obtained here. This is what they had to say:

“We also initiated a position in Globant, S.A. (NYSE:GLOB), a provider of outsourced software development, design, and digital marketing services for business customers. Globant (NYSE:GLOB) helps companies such as Disney (NYSE:DIS), Electronic Arts (NASDAQ:EA), and Banco Santander (NYSE:SAN) pursue digital transformations using a highly skilled workforce of over 23,000 software engineers and consultants primarily based in Latin America. These employees are trained in the latest technologies, including cloud infrastructure, cybersecurity, data analytics, artificial intelligence, digital marketing, enterprise software platforms, blockchain, connected devices, and metaverse. The company was founded in 2003 by four friends in Argentina who still run the company, including Chairman and CEO Martín Migoya. Globant (NYSE:GLOB) serves over 1,100 customers across a variety of sectors, but its largest vertical is financial services. The company helps financial institutions adopt digital lending practices, improve operational efficiency, optimize risk management practices, comply with changing regulations, and launch new payment and open banking solutions.

We have long admired Globant’s (NYSE:GLOB) success and used a recent valuation pullback to buy the stock. Like our other digital IT services companies (e.g., Endava, Accenture, and CI&T), Globant (NYSE:GLOB) benefits from the growing need for digital transformation from businesses around the world. Revenue and earnings per share have grown at annualized rates of 32% and 29%, respectively, over the last five years. Management noted on the most recent earnings call that “demand for our end-to-end digital services and platforms is much stronger now than it was before the COVID-19 pandemic,” which should support robust growth in the coming years. Globant (NYSE:GLOB) operates in a large and fast-growing global market that IDC estimates is approximately $650 billion in size growing at a mid-teens rate. Globant (NYSE:GLOB) is growing much faster than the market from both organic expansion and accretive acquisitions. While barriers to entry are low in the IT services industry, barriers to success are high due to long sales cycles, the importance of strong reputations and personal relationships, and a global shortage of IT talent. In contrast to other digital IT services companies based in central and eastern Europe, Globant’s (NYSE:GLOB) presence in Latin America confers advantages from being in the same time zone as North American clients and from lower geopolitical risk around the Russia-Ukraine war.”

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