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November 7, 2022

mins to read

SaaS Market Overview and What's Changed After Covid-19

In 2020, after working as a full-service app development agency for five years, we at Eleken decided to focus exclusively on SaaS and became the design studio that we are now.

Why SaaS? It’s one of the fastest-growing markets and the design is crucial to it.

In the same 2020, the coronavirus pandemic came to our world. Everybody’s life and work changed and the SaaS market changed, too. It turned out that our shift to SaaS happened at a good moment — in 2020’s meaning of “good”, of course.

We can tell a lot about how cloud is the future but don't trust bare words. In this article, we have collected all the most important numbers of the SaaS industry, visualized and explained.

SaaS market size

There are so many reports on the SaaS industry, each one giving different projections. What they all have in common is the fact that the SaaS market will indeed continue to grow in the following years.

The most optimistic prediction promises over 25% CAGR in the following years. CAGR, Compound Annual Growth Rate, is the metric that is most commonly used by investors to indicate the potential of a business or industry.

However, even the modest reports show quite a promising future. According to the report by The Business Research Company, the global SaaS market will grow from $212.20 billion in 2021 to $240.61 billion in 2022 at a CAGR of 13.4%. In 2026, the market will get to $374.48 billion at a CAGR of 11.7%.

global saas market CAGR 11,7%

The industry has been growing significantly during the last few years. All the researches predict SaaS CAGR to be no less than 10% for the next five years. SkyQuest Technology consulting report says that the market will reach $720.44 billion by 2028.

According to Gartner, end-user SaaS spending will reach $208 billion, accounting for ⅓ of all public cloud end-user spending.

SaaS end-user spending forecast by Gartner


2021 showed a huge rise in venture capital (VC) investments in SaaS. In 2022, the growth rate will not maintain that crazy high, but if we compare it to the 2020 and previous years, we see that by June of 2022 the number is already bigger than it used to be two years ago.

SaaS capital investment
Data as of 6/9/22 and subject to change due to data updates or methodology changes by PitchBook; deal count and capital invested excludes PE Growth and Corporate deals. SaaS vertical defined using PitchBook’s methodology for industry verticals. Source: PitchBook.

Series C valuations account for such a big jump in VC investments. As stated in the report by Silicon Valley Bank, late stages of funding are what investors are going for.

saas market overview 2022

COVID hangover

If I learned something from life is that good moments don’t last forever. The same thing happens with SaaS market success: after steroids-level of growth during the pandemic inevitably comes the hangover.

Recent dynamics of SaaS on the public market has shown that revenue multiples are lowering. Revenue multiple is a ratio that measures the value of the company based on the revenue. A higher ratio makes a company more attractive to investors.

Is this number really alarming? Probably not. As Jason Lemkin, the founder of SaaStr says, there is no reason for worrying. The abnormal COVID rise has to stabilize when the pandemic is over or even before. However, the general positive tendencies will go on.

Biggest investments in SaaS

Talking about investments, the pandemic didn’t make a revolution. Some companies like Zoom have grown to an unprecedented level, but if we look at the biggest investments of 2022, we see the products belonging to the same good old fintech, business management, CRM, data management, eCommerce, and so on.

saas investments 2022

Sectors that got more attention due to the pandemic, such as healthcare and online education, did not dominate the market (with the exception of cybersecurity, which has been an important issue for a while and only got more attention because of remote work). However, on this list of fastest growing SaaS by Latka, we can see that the top ones are cybersecurity and collaboration software.

Image credit: Latka

And there is another little trend — SaaS management SaaS. You read that right, it’s not a typo. There are so many SaaS, that new products are now needed to manage them. Examples are NachoNacho and Cledara.

Niches that have grown during pandemic


When talking about the pandemic impact on SaaS, it’s impossible not to mention healthcare products. During months that all the attention was turned to the medicine, it couldn’t have been not reflected in tech.

According to estimates, healthtech is 10 years behind other industries in terms of digitalizing processes. It means that there is a lot of space for improvement.

There’s no surprise that telehealth is one of those sectors that experienced huge growth since the pandemic started. In 2021, the spike in telehealth usage has stabilized, but it’s still a huge number compared to pre-pandemic levels. Here is a graph from McKinsey research. The report shows that the investments have grown as well.

However, it’s not only about telehealth. There are also products that automate health management, apply artificial intelligence (AI) to diagnostics, or help users track their health dynamics. The sector is quite diverse. 

As an example, at the end of 2021, Oracle acquired electronic health records company Cerner for $28 billion. Big companies invest in the sector and will continue to do so after the pandemic.

From our personal experience, recently our designer got to work on a healthtech project, Refera. It was a discovery of a whole new world. There are so many things that have to be considered when designing a product for medical workers. If you are curious to learn more about the state of healthtech and what UX has to do with it, read our article healthcare UX challenges.

Cyber security

While remote work became a blessing for some workers, it also became hell for many CISOs, which stands for Chief Information Security Officers. Outside of safe office LAN spaces, work data on private computers became exposed to all sorts of dangers.

Such issues need a new approach to information security, and SaaS seems a logical solution to it. During the last two years, a number of cybersecurity products got big funding, among them are Illumio, Tanium, Bright Security, and Netskope.

Our designers didn’t lag behind as well, and we have some experience working with the code security app Tromzo — you can find more in the case study.


Remote learning was no less of a challenge for the education sector than remote working for business. In the early months of  the pandemic, a number of eLearning products, such as Vedantu, Kano, Duolingo, and Eeo education got good funding. The biggest investments got Vedantu ($190.9M) and Eeo education ($265M).

New learning opportunities will be in demand in times of crisis when people are forced to change their jobs and learn something new all the time to stay afloat. However, edtech is not limited to online learning platforms. There is a lot of space for AI, ML, AR, and other more prosaic but highly needed things such as education workflow automation tools. 

Along with the popularization of online learning, traditional educational institutions have to work hard to attract students. That’s how student engagement software comes useful. Check out our story about Enroly to get a better idea.

Online events

Remember when people in 2020 wondered if they will get used to online events and refuse live ones? In 2022, it’s pretty clear that screen communication can’t replace personal contact. Yet, we had two years to see the opportunities the online events open, and sure they have taken their place in people’s everyday life — and the SaaS market is no exception.

I’m far from saying that there is a huge flow of online events software, although there are some examples such as Hubilo, a virtual events platform that raised $28M in 2021. Most SaaS online events advance came through extensions of existing apps. As an example, a very offline-focused product, Urban Sports Club, promoted online training, and even Airbnb was doing online experiences.

Online events on Airbnb and Urban Sports Club

COVID-specific products

Remember when in the first months of the pandemic, apps for social contact tracking started to appear? There was much concern about privacy, but in some countries, they showed good results.

Naturally, these solutions gained momentum only shortly, without having much impact on the SaaS market, they are worth mentioning in this article. It’s interesting to see how some of them turned out to be functional even beyond the COVID.

In 2021, we’ve got to work on Haven diagnostics, a product that helps companies manage the return of employees to offices in a safe and healthcare regulations-compliant way. We could witness how fast they had to pivot: the situations changed every month. The product even inspired us to write the article offices vs COVID.

Haven Diagnostics started by just creating analysis and offering solutions to clients personally and wanted to grow into a product and automate the process. After some research, they realized that their services were useful not only to prevent COVID contagions. Distancing and work safety measures worked as well in preventing flu and other viruses from spreading.

Did you know that in the US, employees miss up to 111 million workdays because of the flu? It results in a $16,3 billion yearly earning loss. Although the danger of COVID is now very little, Haven Diagnostics has the future.

The development wasn’t easy for the founders. There have been issues with compliance and privacy, too. However, the product turned out to be usable and provide value to users, – and also had a great design! Check out the case study to prove we’re right!

Market segmentation

By region

The USA is leading in the global SaaS market, leaving the rest of the world far behind. The fastest-growing region is APAC (Asia-Pacific). Although it is not likely to become the leader in the next five or so years, investors are attracted by the vast amount of opportunities in the emerging market. Given the slow adoption of SaaS in the APAC region, most of the products have to rely on the international market to gain good traction.

Latin America SaaS market is also growing fast, especially within the ecommerce sector. Europe has a strong market, second after the USA. European companies tend to go global and focus on monetization at early stages.

Here is a heatmap of the SaaS world, ranging by the size of revenue.

Please note that Singapore ($10.3B) and Hong Kong ($5.9B) are also present on the map. Countries with revenues in SaaS business below $2B are not colored. Data is taken from Latka.


If you were concerned whether the software-as-a-service industry is a good place for new business, there is nothing to worry about. The SaaS market remained healthy even when the pandemic hit. Its growth has been positive during the last few years and all the forecasts say it will be so in the next few years.

The popularity of micro SaaS is what makes the entrance to the market accessible for niche independent products. Remote work, the spread of 5G, artificial intelligence — all of it favors new cloud solutions and opens numerous opportunities for startups. To find out what else is shaping the market right now, read our article about the latest SaaS trends.

Masha Panchenko


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