The rise of Norwegian and international B2B SaaS companies has been remarkable over the past 5 to 10 years. These companies share a strong value proposition enabled by technology, typically aimed at simplifying and automating business workflows and processes, boosting productivity, or enhancing insights through data collection and aggregation. Their business model is also attractive, featuring a high proportion of contracted and recurring revenue and a scalable cost base that allows for high margins.
Strategy& has closely monitored the market over time, identifying over 250 Norwegian B2B SaaS companies with revenues exceeding 30 million. In total, these companies have revenues of NOK 60 billion and employ around 25 000 employees.
– The B2B SaaS market is very exciting and continues to grow at around 20% annually. A large portion of new companies in Norway are technology-based, and we are closely following their emergence.
Brun highlights investor willingness to pay as evidence of the attractiveness of these companies. Many B2B SaaS companies are valued and sold for more than 5x revenue and 20x EBITDA, and even higher for the very best companies. This pricing reflects expectations for growth in this market, driven by strong value creation potential through cost savings and improved productivity.
Head of Strategy& in Norway, Anders Brun, highlights the exciting growth in the B2B SaaS market, with companies valued well above traditional levels.
B2B SaaS Survey 2024
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Norwegian B2B SaaS companies with differentiated strategic positioning
This year, Strategy& also conducted a survey to gain more insight into the strategic positioning and financial performance of leading Norwegian B2B SaaS companies. A total of 55 Norwegian companies participated. Key findings include:
Norwegian B2B SaaS companies are typically specialized towards industries such as maritime, energy, and retail (“vertical B2B SaaS companies”).
Customers are often medium to large companies with greater demands for customization and local presence, with less competition from global companies.
Financial development has been strong, with an average annual revenue growth of 21% from 2020-2023, and 2023 EBITDA-margins of 12%.
Growth expectations for 2024 are down by 3ppts compared to 2020-2023, likely due to a more challenging macroeconomic climate.
There are also clear differences in growth and profitability profiles for companies of different sizes. Early-stage companies often incur significant product development costs, but as the product is commercialized and sold at larger scale, profitability improves significantly, in particular among companies that manage to maintain low churn.
Impact of AI
The rise of artificial intelligence (AI) has made B2B SaaS even more relevant. AI offers a strong potential for further innovation and product development, and many more B2B SaaS companies are likely to emerge over the coming years. AI technologies, such as machine learning and predictive analytics, enable optimization of complex problems, as well as automation of standardized tasks. Additionally, AI allows for the analysis of large data sets from various sources, helping to gather insights and make more informed strategic decisions. The latter represents an area where Norwegian B2B SaaS companies expect the greatest increase in use of AI over the next 3-5 years.
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