Welcome to the latest edition of the CEE SaaS Index, developed by Warsaw Equity Group and Vestbee to provide a clear, region-specific benchmark for valuing SaaS companies in Central and Eastern Europe. The following index aims to help founders, investors, and members of the local startup ecosystem track valuation trends, compare regional performance with global benchmarks, and better understand the trends shaping the future of SaaS in CEE.
Global market burning for AI
Global VC deal value reached $126.3 billion in Q1 2025, a 6.4% QoQ increase and the most substantial result since early 2022. But the surge was narrowly focused: over 71% of the US funding went into AI and ML startups, while deals under $5 million fell to a decade-low 36%, as investors pulled back from early-stage investments amid geopolitical uncertainty and renewed US tariffs.
In contrast, Europe’s VC market remained flat at $12.6 billion, capturing just 11% of global capital, down from 16% in 2024. The decline was partly due to outsized US rounds like OpenAI’s $40 billion raise. Still, sectors like healthcare (32% of total funding), fintech, and AI-related solutions continued to attract steady investment across the continent.
CEE startup ecosystem
The CEE startup ecosystem continues its upward climb. Dealroom’s recent report shows that the region is home to over 3,800 startups and 275 scaleups, with a combined enterprise value nearing €243 billion, as of Q1 2025. Poland remains the regional heavyweight with €58 billion in enterprise value, despite posting the slowest five-year growth rate among CEE countries (1.4x). In contrast, Lithuania has emerged as a hidden champion, growing nearly 6x since 2020; followed by Serbia, Latvia, and war-tested Ukraine, which has become a regional hub for defence tech innovation.
US and CEE revenue multiple narrowing gap
The CEE SaaS Index closed Q1 2025 at 3.65x revenue multiple, up 11.3% from the previous quarter. In comparison, the US BVP Cloud Index ended the quarter at 6.26x — slightly down from 6.86x at the end of the year, and still well below its 2021 peak of 18.43x. Since Q2 2022, US SaaS valuations have remained in a single-digit range, fluctuating modestly but showing no signs of returning to previous highs.
CEE SaaS companies recorded a 9.93% median revenue growth rate, compared to 17% in the US. Meanwhile, the market capitalization of the CEE SaaS Index declined slightly from €1.96 billion to €1.89 billion (down 3.6% YoY), reflecting stagnating growth expectations. For comparison, the EMCloud Index recorded a 5.5% YoY decline in market capitalization, underscoring a broader trend, which is not limited to the CEE region.
EU funding fuels CEE innovation
What may shape the future of the CEE tech sector is long-term public investment. Since 2021, nearly €100 billion has been allocated through the EU Recovery and Resilience Facility (RRF) to Poland (€59.8 billion), Romania (€29.1 billion), Czechia (€7.1 billion), and Lithuania (€2.2 billion), with a strong focus on digital transformation, innovation infrastructure, and SME development. This creates a unique structural opportunity for the region’s SaaS and AI startups.
The US ecosystem grew from public funding, from DARPA to NASA, which helped de-risk early technologies and attract private capital. Europe may now be at a similar point, where strategic public investment could catalyze broader innovation across the region.
SaaS at a crossroads
The SaaS model is now evolving. At the recent Microsoft Ignite keynote, Satya Nadella, CEO of Microsoft, described a shift from traditional software tools to intelligent collaborators — from software that supports our work to software that increasingly does the work. This transition marks the early stages of what Nadella, in a later interview with Varun Mayya, framed as the rise of “agentic” software.
For SaaS startups in CEE, especially those focused on vertical applications, this marks a pivotal moment. Those who adapt can gain a strategic edge; those who don’t risk being left behind.
About CEE SaaS Index
CEE SaaS Index is a simple tool for startups and investors to value SaaS companies in Central & Eastern Europe based on revenue multiples from publicly traded SaaS companies from the CEE region, developed by Vestbee and Warsaw Equity Group.
While revenue multiples from publicly traded SaaS companies can provide a helpful starting point for valuation, currently available indexes are only based on US-listed SaaS companies, leaving the CEE region without relevant benchmarks, despite the region's thriving startup ecosystem and quadrupled VC funding over the last three years.
With projected growth and increased investment in CEE tech companies, a more appropriate valuation benchmark for regional startups and investors is required. To meet this need, Vestbee and the Warsaw Equity Group have collaborated to develop the CEE SaaS Index, providing a relevant benchmark for regional and international investors.
Key updates on CEE SaaS Index performance for March 2025 include:
- The median CEE revenue multiple rose to 3.65x annualized revenues at the end of Q1 2025, up from 3.28x in Q4 2024 and 3.21x in Q3 2024, though still below 3.70x in Q1 2024, reflecting modest year-over-year compression.
- The market capitalization of all companies included in the CEE SaaS Index slightly declined to €1.89 billion, down 3.6% YoY from €1.96 billion in Q1 2024, though still above year-end 2023 levels (€1.75 billion), indicating cautious optimism amid mixed growth expectations.
- By comparison, the median US revenue multiple (BVP Cloud Index) closed Q1 2025 at 6.26x, down from 6.86x in Q4 2024 but still up year-over-year from 6.03x in Q1 2024. Despite this dip, US SaaS valuations remain 71% higher than their CEE counterparts — a narrowing gap from the 109% premium in Q4 2024.
- CEE-based SaaS companies continue to trail US peers in revenue growth, recording a 9.93% median YoY increase vs 17% for US-based SaaS firms, highlighting ongoing scalability and capital access challenges in the region.
