Jan 19There’s Nothing Small About Niche Software BusinessesInvestors often refer to vertical SaaS vendors as “niche” software companies, which can mean different things depending on their opinion about industry-specific software. Vertical SaaS bears will interpret niche to mean that these software businesses have a small total addressable market and limited upside potential. Vertical SaaS bulls see niche…Vertical Saas3 min readVertical Saas3 min read
Jan 12Southwest Airlines and the Value of Vertical SaaSIn late December, hundreds of thousands of people found themselves stranded at airports around the country due to a meltdown at Southwest Airlines. Between December 21 and December 31, the budget airline canceled nearly 17,000 flights due to a “once in a generation” winter storm that impacted nearly every state…Vertical Saas3 min readVertical Saas3 min read
Jan 5Vertical SaaS Moats, Part 3: Switching CostsIn part 3 of our series on vertical SaaS moats, Fractal senior associate Evan Gabriel explains how startups can build high switching costs into their products. Missed Part 1 and Part 2? You can read them here. Churn is a major concern for every SaaS company, but vertical SaaS businesses…Vertical Saas7 min readVertical Saas7 min read
Dec 22, 2022Top Vertical SaaS Stories of 2022The past year has been an exciting time to be in vertical SaaS. Despite a turbulent macro backdrop, we’ve seen relatively strong performance for vertical SaaS companies in public markets, a wave of industry software M&A, and a herd of new vertical SaaS unicorns has joined the stable. We learned…Vertical Saas3 min readVertical Saas3 min read
Dec 15, 20225 Vertical SaaS Predictions for 2023As 2022 draws to a close, it’s worth reflecting on how extraordinary — and truly unpredictable — the past 12 months have been for investors and operators in the vertical SaaS space. We saw public markets tumble into bear market territory from their all-time-highs in late 2021, but despite these…Vertical Saas4 min readVertical Saas4 min read
Dec 8, 2022Year in Review: Vertical SaaS in Private MarketsIn the past 12 months, vertical SaaS companies in private markets have seen a substantial amount of activity in terms of both M&A and valuation increases. Since the last State of Vertical SaaS was published in October 2021, investors have minted 11 new vertical SaaS unicorns. This represents a 40%…Vertical Saas5 min readVertical Saas5 min read
Dec 1, 2022Year in Review: Vertical SaaS in Public MarketsThese days it seems like optimism about the future of tech is the rarest of commodities. But the gloominess about the collapse of tech valuations — and SaaS valuations in particular — only makes sense if you look at the performance over the past 12 months. …Vertical Saas3 min readVertical Saas3 min read
Nov 17, 2022Vertical SaaS Moats, Pt 2: Network EffectsIn part 2 of our series on vertical SaaS moats, Fractal senior associate Evan Gabriel explores one of the most powerful moats of them all: network effects. Missed part 1? You can read it here. Economic moats are a vital source of competitive advantage for all growth-minded companies, but not…Vertical Saas6 min readVertical Saas6 min read
Nov 16, 2022Vertical SaaS Moats, Part 1: Economies of ScaleThis essay was written by Fractal senior associate Evan Gabriel. It is part 1 an ongoing series on moats in vertical SaaS. There are many ways to kill a business — competition, capital mismanagement, failure to find product-market fit, and founder incompetence can all be the final nail in the…Vertical Saas4 min readVertical Saas4 min read
Nov 3, 2022Vertical SaaS: It’s All About ControlOne of the biggest competitive advantages that vertical SaaS companies have over horizontal SaaS providers is that their software is designed for the particular needs of a narrowly defined customer segment. …Vertical Saas3 min readVertical Saas3 min read
