Nordic B2B
Software Growth

2024 was another challenging year, but it ended with strong positive momentum.

We observed a trend shift, with startups (€ 0-1M in revenue) reporting an accelerating average growth rate. Larger companies experienced slightly declining growth rates in 2024 but remain optimistic about the 2025 outlook.

While challenges such as economic uncertainty and competitive pressures remain, the overall sentiment in the sector is cautiously optimistic, with many businesses positioning themselves for renewed expansion in the coming year.

Within our portfolio companies, we saw strong growth momentum in Q4 2024, reinforcing the positive growth sentiment heading into 2025.

“Rule of 40,” the benchmark combining revenue growth and EBIT, remains a challenging goal for most Nordic software companies.

Smaller companies (€ 0-1M in revenue) maintain the highest median Rule of 40 scores, while larger companies struggle to sustain strong performance.

The data reflects a common SaaS growth pattern: as companies mature, sustaining high growth rates becomes more difficult, and improving profitability alone often does not fully compensate for the slowdown.

The decline in the Rule of 40 metric is primarily due to lower growth rates in 2024, while the median EBIT margin was slightly higher—except for companies with over €25M in revenue.

To stay competitive, SaaS companies need to balance revenue growth with profitability improvements as they scale, focusing on operational efficiency, customer retention, and pricing strategies, etc.

Net growth sentiment heading into 2025 remains positive, but a larger share of companies expect a decelerating growth rate.

Comparing companies of different sizes reveals further polarization: firms with under €5M in revenue show a clear deterioration in sentiment compared to last year, while larger companies are, on average, more optimistic.

Overall, companies are more confident in their internal capabilities to drive growth, though some express concerns about external factors negatively impacting them in 2025.

49% identify expanding upsell as a top three growth area for 2025, down from 57% in 2024.

Hiring more salespeople, reviewing pricing models, and increasing marketing spend have seen the highest relative increase on the growth agenda compared to 2024. All of these initiatives target new customers but do not involve expansion into entirely new markets.

International expansion and new sales channels remain high-priority growth levers but have both declined in importance compared to the previous year.

M&A activity has also declined significantly, with only 12% considering it a key growth lever in 2025, down from 19% in 2024.

Companies internationalize at an early stage.

Deciding when to invest in new market expansion is complex—investing too early risks lacking a clear product-market fit and a strong competitive position. Investing too late risks losing growth momentum in the often limited home market.

Sales execution, marketing execution, and international expansion remain the top challenges for Nordic B2B software companies.

Product development has become increasingly difficult, particularly for larger companies—75% of those with over €25M in revenue report it as a top three challenge.

Marketing execution remains a significant challenge, especially for smaller companies (less than € 5M in revenue), where approximately 40% identify it as a top concern.

Customer churn increased significantly in 2024, with 22% of respondents ranking it as a top three challenge—up from 8% in 2022. The challenge is even greater for companies with over € 5M in revenue, as more than 35% cite it as a top concern.

Keep track of your KPIs.

All teams should measure success using the same key metrics, with customer satisfaction, CAC-payback, and NRR being the most important.

The best way to understand your customers and plan ahead is through data.

Collect it. Analyze it. Learn from it — together.

Marketing spend should reflect the GTM model.

Not surprisingly, organizations with a marketing-led sales approach invest the most in marketing, while product-led growth companies invest the least.

Unlike last year, there was no significant difference in how much companies spent on marketing relative to their growth rates.

Marketing spend was relatively similar across geographies, although Finnish companies, on average, spent less on marketing than their Nordic peers.

This year, we asked how long it takes to convert a prospect into a signed client.

In 2024, the average sales cycle length for B2B software companies in the Nordic region was 6.9 months.

There is a strong correlation between ARPA and sales cycle length, as more expensive solutions tend to be more complex.

While the go-to-market approach also plays a role—Product-Led Growth and Enterprise sales typically require longer cycles—higher ARPA remains the strongest predictor of sales cycle length.

Regional differences between the Nordic countries’ ability to meet sales targets in 2024.

Finnish companies struggled the most, with an average attainment of 71%, while Norway and Denmark performed significantly better at 92% and 91%, respectively. Sweden landed at 80%.

These results may suggest that Finnish companies faced greater sales challenges than the rest of the Nordics—or perhaps cultural differences influence how sales targets are set across Nordic companies.

Furthermore, businesses with <20 employees achieved 77% of their sales budget on average, though companies across all sizes faced challenges in reaching their targets.

The average CAC-payback remained nearly unchanged from last year.

Although CAC-payback remains similar to 2023, this year has still been challenging due to decreased marketing spend and long sales cycles.

Company size still played a role, with smaller companies generally reporting lower CAC-payback times. However, the go-to-market model also influenced CAC-payback benchmarks. Companies using an inside sales model reported relatively high CAC-payback times on average, though not as high as those with an enterprise sales model.

Enterprise sales remains the most common go-to-market model among B2B software companies.

56% of all companies report enterprise sales as their primary motion, consistent with last years’ report.

Results indicate that both Enterprise and Inside sales is becoming more popular, growing at the expense of Channel / partner sales and Product led growth.

Regardless of your go-to-market model, it is crucial to get it right in order to scale a software company successfully.

Average annual churn at 5.6% in 2024

Average churn has increased by approximately 1 percentage point compared to 2023.

As Nordic software providers enter 2025 with a focus on acquiring new customers and expanding marketing efforts, they must also remain mindful of rising churn rates and continue to nurture their existing customers.

Companies with longer sales cycles and higher ARPA typically sell more integrated and complex solutions, which naturally result in lower churn rates. Your churn targets should be aligned with the type of solution you offer.

Average NRR at 105% in 2024.

NRR declined by approximately 1 percentage point compared to last year, driven by an increase in churn.

For the second consecutive year, when excluding price increases for the existing customer base, NRR fell below 100% on average. This indicates that companies in the survey experienced more churn and downsell than upsell in both 2024 and 2023, excluding price adjustments.

Companies with a higher ARPA should target a higher NRR than those offering lower-priced solutions. In 2024, top performers with an ARPA of € 100k or more achieved an NRR of 122%.

What is Net Revenue Retention: NRR is the percentage of your recurring revenue retained (incl. churn and down-sell) over a year plus the effects of upsell and cross-sell (revenue expansion)

Nordic B2B software companies report an impressive average NPS of 47 consistent with 46 from last year.

Finland is not only the happiest country in the world, according to our survey, it also has the happiest B2B software customers in the Nordics.

NPS remains high across the Nordics, but compared to last year, customers of Danish and Finnish companies are happier than those of Swedish and Norwegian companies.

NPS¹ is a strong indicator of future Net Revenue Retention (NRR). Satisfied customers become advocates for your solution, creating a virtuous cycle that drives both inbound leads and conversion. Customer satisfaction is a team sport, but the Customer Success Management (CSM) team plays a crucial role in maintaining a high NPS.

What is Customer NPS: Net Promoter Score (NPS) is a customer loyalty and satisfaction measurement taken from asking customers how likely they are to recommend your product or service to others on a scale of 0-10. NPS= % share of Promoters (9-10) - % share of detractors (0-6)

Companies with a higher ARPA¹⁾ were typically able to support a larger revenue base with fewer Customer Success Management (CSM) and support employees.

The ability to support a large revenue base with your CSM and support employees is critical for achieving scalability in your business.

Businesses with a lower ARPA tend to have larger customer success and support teams to manage a higher volume of customers who often require assistance. Taking a strategic approach to CSM and support—by leveraging self-service options, enhancing product UX, and integrating AI support tools—can help increase the revenue base each CSM and support employee can effectively manage.

User-based pricing remains the most widely used model, with 36% of companies adopting it.

However, many companies are evaluating their pricing models, with usage- or transaction-based pricing expected to become more prevalent in the next 2–3 years.

User based pricing models becomes less relevant for many B2B software companies as the software often improves efficiency and reduces the need for users at customers. Finding pricing models that more accurately reflect the value of the software solution is critical.

Nordic software companies continued to increase prices in 2024, at 6.8% on average

For the second year in a row, Finnish companies had the lowest price increases across the Nordics.

Companies targeting smaller customers were more successful in raising prices in 2024, whereas companies targeting enterprise customers reported less price growth.

Looking ahead, pricing is back on the agenda for 2025, with 23% of companies ranking it as a top-three growth priority, up from 18% in 2024.

Most Nordic software companies have started experimenting with AI opportunities.

Only 5% of companies reported not having started exploring AI, the same as last year. Meanwhile, the share of companies that have integrated or are in the process of implementing AI increased to 42%, up from 33% last year.

There are clear differences among the Nordic countries in AI integration. Finnish companies report being the furthest along in their AI journey, while companies in Denmark have made the least progress.

Artificial intelligence is being implemented in internal operations before product offerings.

In 2024, half of companies reported having started AI implementation or integration in their internal operations.

Larger businesses with revenues over €10M have primarily focused on advancing AI in their internal operations, while smaller businesses with revenues under €10M have prioritized integrating AI into their product offerings.

A well-defined product vision and roadmap is essential for successfully implementing AI in the product. It helps align AI initiatives with broader business goals and provides a clear strategic direction.

Nordic software companies report that AI is already enhancing their internal efficiency.

Almost 9 out of 10 companies exploring or using AI for internal operations are already seeing cost savings or efficiency improvements.

Unsurprisingly, integrating AI into product offerings takes more time. Only 4 out of 10 companies have successfully monetized AI in their offerings so far. Some AI investments may also be necessary to maintain a competitive edge in core offerings.

We expect to see an increase in adoption of AI in the core product, with more clear monetization opportunities, often coupled with new pricing models.

Average revenue per FTE is a key driver for profitability.

Employees represent the largest OPEX item on a software company’s P&L. Optimizing their performance is crucial for sustained long-term profitability.

While the optimal size of a software organization depends on many factors, one principle remains key: a successful SaaS business should increase ARR per FTE as it scales. In 2024, the average revenue per FTE was € 220K for companies with over € 10M in revenue, compared to € 100K for those under € 1M.

The average revenue per FTE was slightly down in 2024, at € 160k compared to € 180k in 2023, but still above the average of € 150k in 2022. This indicates that many software companies appears to have started to hire more again, preparing for growth in 2025 and beyond.

Scalability is a key value driver for SaaS businesses. However, there may be periods where strategic investments in the organization are necessary to accelerate growth, even if it results in a short-term decline in revenue per FTE.

In response to challenges in product development, more companies are measuring R&D efficiency compared to 2023.

Companies are also tracking a greater number of metrics on average in 2024. Additionally, more precise metrics are becoming common, while the use of R&D spend as a percentage of revenue has declined.

This suggests that Nordic B2B software companies are prioritizing smarter and faster development in the wake of the AI boom.

Average employee churn at 9.9%, up from 7.6% in 2023

There were large differences between countries, with Norwegian companies seeing low employee churn and Danish and Finnish companies seeing high churn.

Compared to previous years, both smaller and larger companies experience similar employee churn levels.

Salaries increased by an average of 4.4% in 2024.

This is slightly lower than in 2023, and expectations suggest that salary increases will continue to decline into 2025.

Salary growth in 2024 was relatively consistent across companies of different sizes, as well as between profitable and unprofitable businesses. However, there were slight regional differences, with Sweden (4.4%) and Norway (4.1%) seeing higher increases than Finland (3.9%) and Denmark (3.8%).

Notably, the expected salary increase for 2024 was 5.4%—one percentage point higher than the actual realized increase. Similar to previous years, Nordic companies budgeted for higher salary increases than were ultimately implemented, allowing for some financial flexibility to improve profitability.