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Enterprise SaaS investment makes a comeback — but not where you'd expect


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The global market for software is growing rapidly, with software spend being the fastest-expanding segment of IT spend according to Gartner data. However, investment into enterprise SaaS startups has slowed in recent years. In 2023, venture investment into enterprise SaaS fell by 32% in terms of deal volume and 33.3% in terms of transaction value compared to the previous year. Despite this, there are some positive signs, with Q4 2023 seeing a 12% increase in total dollars invested compared to Q3 2023. Customer relationship management (CRM) was the leading growth category in Q4 2023, followed by supply chain management and knowledge management systems. The rebound in software investment can be attributed to factors such as improving net retention at software companies and the stock market rebound. However, startups still face challenges due to high average revenue multiples for public software companies.

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