Vertical Markets
Segment-specific startups frequently outperform their horizontal counterparts and do so with greater efficiency, lower churn, and simpler GTM motions. While some investors see these markets as too small, leading fields like insurance, supply chain & logistics, construction, and healthcare represent huge portions of the economy. Each contains many billion-dollar corporations with hundreds of thousands of employees. The integration of AI into workflows presents a major opportunity across these vertical techstacks, potentially acting as a forcing factor in allowing new entrants into hard-to-penetrate industries. We’ve seen a key element of success in segment-specific startups lie in founder-market fit, based on our experience with entrenched founders driving real impact—and real revenue.
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History Lessons
More About Vertical Markets
Anna Khan wrote about Five Takeaways Investors and Entrepreneurs Often Overlook given her vertical portfolio at CRV.
Equal Ventures does early stage investing from the East Coast, and loves to load up on vertical software companies. Their writing covers a broad set of topics but includes tons of vertical gems.
Euclid invests exclusively in vertical software at the seed stage. No surprise, their content covers a wide variety of topics important to vertical including market size, buyouts, PMF, and even what founders can learn from Donald Rumsfeld.
Fractal Software has a lot of great, evergreen content, including their State of Vertical SaaS report.
Tidemark has gone so far as to publish a vertical software knowledge project, with tons of powerful content.
Tomasz Tunguz covers a wide range of software topics, including why vertical companies may be more efficient on sales and need different GTM models.