Search fund and SaaS acquisition in Europe: the model redefining M&A in 2026

The search fund is an entrepreneurial acquisition model that emerged in the United States in the 1980s (created at Harvard Business School) and has experienced exponential growth in Europe since 2020. The principle: an entrepreneur (the "searcher") raises between €400K and €600K from investors to fund their acquisition search (18–24 months), then raises a second round to fund the acquisition itself. IESE Business School, which publishes the annual reference report on search funds, counted 85 active search funds in Europe in 2025, a growth of +38% vs 2024.

Why search funds prioritise SaaS targets

The logic is clear: a profitable SaaS with recurring ARR offers a predictable revenue base that allows servicing acquisition debt and remunering investors. SaaS metrics are also easier to audit and project than revenues from an industrial SME. European search funds primarily target B2B SaaS with ARR between €1M and €5M, positive (or near-positive) EBITDA, and a founder ready for a clean transition.

The two models: traditional vs self-funded search fund

• Traditional search fund (funded search): the searcher raises €400–600K in phase 1 to fund 18–24 months of search. Investors receive preferential investment rights on closing. In phase 2, a €2–10M round is raised for the acquisition. The searcher receives 20–30% of equity (carried interest) in exchange for their operational role. Historical returns: median IRR of 35% for investors (IESE 2024).
• Self-funded search: the searcher finances the search phase themselves (often with savings or a parallel consulting activity). They retain a larger share of equity but take more personal risk. Fast-growing model in Europe (+55% in 2025) as it allows greater independence and execution speed.

Criteria for a "search-fundable" SaaS

• ARR between €1M and €5M: minimum size to justify a structured acquisition with formal due diligence. Above €5M, search funds compete with institutional PE.
• Positive or breakeven EBITDA: the search fund must be able to service acquisition debt with the asset's cash flows. A chronically loss-making SaaS requires additional equity financing that dilutes the searcher.
• Operationally absent founder: the searcher must be able to take the reins quickly. An asset where the founder is the only one who knows the technical architecture or key clients is a time bomb.
• Defensive and stable market: search funds avoid rapidly disrupted markets (pure AI players, crypto) in favour of stable business verticals (legal, HR, accounting, sector ERP). These markets offer lower churn and longer but more predictable sales cycles.

How Aegryn supports search funds

Aegryn has a qualified deal flow of Grade-certified SaaS assets between €1M and €10M ARR. Search funds registered in the Aegryn network access this deal flow with priority, with assets pre-audited across the four dimensions (Code, IP, Finance, Security). This reduces the duration and cost of due diligence by 40–60% vs an unstructured process. Search funds can also submit precise search mandates (target vertical, target ARR, geography) for access to confidential deal flow outside marketplaces.