The first decade of European B2B software — roughly 2012 to 2022 — produced a cohort of companies that proved the basic proposition: enterprise software built in Europe, with European buyers as the initial market, could scale to hundreds of millions of euros in ARR and, in some cases, public market valuations. This was not obvious at the start of that decade, when the conventional wisdom was that European enterprise software companies would always be acqui-hired before reaching scale, and that the US market was the necessary validation step for any serious B2B ambition. The companies that proved this wrong, and the exits and IPOs that anchored the argument, changed the starting assumptions for the founders who have entered the market in the past three years. The second decade starts from a different baseline.
The structural changes that make the second decade different from the first: a much deeper pool of experienced operators available to found and join B2B companies; a European enterprise buyer base that has completed its initial SaaS education and is now a reasonably fluent buyer of cloud software; a regulatory environment (GDPR, the AI Act, supply chain due diligence regulations) that creates compliance-driven demand for European-origin software that specifically understands the EU regulatory context; and a capital market that, despite the 2022 correction, has a more stable supply of seed and early-growth funding for European B2B than at any point in the previous decade. These inputs compound. The companies starting now have access to founding talent, buyer readiness, regulatory tailwinds, and capital availability that the companies starting in 2012 did not.
What has not changed, and where the second decade will test founders as directly as the first: the enterprise sales cycle. German procurement culture has not accelerated meaningfully in the decade we have been observing it. Works council consultation requirements, IT security review processes, budget governance structures — these are determined by corporate governance norms and labour law that evolve slowly. The companies in the second decade of European B2B that will build the most durable positions are those that have genuinely internalised this as a feature of their market rather than a friction to be minimised. The GTM architectures that work — reference network selling, POC-led enterprise land, vertical cluster expansion — are the same ones that worked in the first decade, with better tools and more available playbooks.
The specific thesis evolution for Kiefern as we look at the second decade: we are increasingly interested in companies where the regulatory environment is not just a compliance requirement but a product differentiation driver. The EU AI Act, the German Lieferkettensorgfaltspflichtengesetz, the Digital Operational Resilience Act for financial services — each creates a compliance obligation that enterprise buyers need software help to meet, and each is creating new buyer budgets that did not exist before the regulation came into force. European-origin companies with legal and technical teams that understand these regulations from the inside are building products that US competitors will take two to three years to reach feature parity on. In an industry where switching costs are high once a vendor is embedded in a compliance workflow, that first-mover advantage within a regulation-driven product category can be decisive.
We are not saying the second decade will be easier than the first — the competitive intensity in European B2B software has increased significantly as the market has matured, and the bar for what constitutes a credible product at seed stage has risen with it. The founders who built category-leading companies in the first decade were operating in a less crowded environment, with less informed buyers making fewer direct comparisons. The second decade requires sharper differentiation at the product level, more sophisticated commercial execution from earlier in the company's life, and a clearer path to network effects or integration depth that can defend against well-funded competition. The capital intensity of building defensible European enterprise software has also increased. What gives us confidence that the opportunity remains compelling is precisely the combination of factors that makes it harder: more regulatory complexity creates more compliance-driven demand; deeper technical talent creates more ambitious founding teams; a more experienced buyer base creates a market that rewards product quality more directly than the early-adopter market of the previous decade. The second decade of European B2B software will be more competitive and more interesting than the first.