10 years of SaaS

Throughout the last decade, the Software-as-a-Service industry has been on the receiving end of an incredible £11.8 billion in equity investment, with over 4,000 ambitious SaaS businesses starting up in the UK since 2011 and more than 500 of them growing to exit.

Operating on a subscription basis and centrally based on a remote cloud network, SaaS models have developed into a go-to for many organisations who, especially in the face of the pandemic, found a sudden need for flexibility, accessibility and affordability in the ways they run their business.

Looking back on the decade, SaaS companies have been steadily and consistently rising in growth, and by 2018, about 89% of the world’s business enterprises were using some kind of SaaS application or solution.

According to Gartner, global revenue generated by SaaS models is expected to reach a staggering USD151 billion by 2022.

Although 500 of the 4000 SaaS companies getting going since 2011 have died, the rest span every stage of business development, from companies which are just starting up, starting to scale, or scaling in earnest.

Most excitingly, almost 40% of SaaS companies are at the seed-stage, with encouraging plans to continue creating, innovating and providing disruptive models to both private and public sector customers, as well as providing great opportunities for investors.

The amount of equity investment secured by SaaS companies has consistently increased every year since 2011, with a high of £3.16 billion in 2020, amounting to 27% of all investments between 2011 and 2021, and with the top recipient in 2020, an artificial intelligence-based security service OneTrust, raising a staggering £162 million in September and £224 million in December.

The sheer volume of deals completed throughout this period climbed without default until 2019, peaking at 1,184 deals and stabilising at 1,159 in 2020.

Though investment in a huge range of sectors was affected by the COVID-19 pandemic, the SaaS industry kept up interest and optimism of both founders and investors.

Overall, in the decade between 2011 and 2021, the number of SaaS companies running and developing in the high-growth ecosystem has increased by a huge 282%, pointing to rising demand for SaaS platforms and applications being created.

Innovation across the SaaS sector has multiplied upon itself over the past decade as companies have created, and continue to create, efficiencies for businesses, consumers and the public sector through software.

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