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.
InsurTech: The insurance industry is currently grappling with the challenges of inflation and rising interest rates, resulting in carrier losses, quickly escalating policy costs, and carriers exiting markets. End consumers are more challenged than ever at finding the right policy at an affordable price. We invest in software underlying the insurance ecosystem and are particularly interested in solutions empowering or disrupting the ecosystem of brokers and carriers.
Architecture, Engineering, & Construction (AEC) and Proptech: Designing, building, and managing the process of construction from start to finish is a sector that is famously underpenetrated with technology. The opportunity in the broader AEC industry to bring efficiencies to one of the largest industries in the world is still largely untapped and we believe new technologies helping to digitize both the jobsite and the back office represent significant opportunities.
Healthcare: At twenty-percent of GDP and still rapidly growing, healthcare means many things to many people. At Scale we are particularly focused on the things we understand best, software and systems that enable the patient journey in the background. We invest in software underlying the healthcare ecosystem and are particularly interested in platforms supporting payment flows, data connectivity, and care delivery.
Supply Chain and Logistics: Supply chain and logistics have been at the heart of the physical economy, but global events continue to remind us that there remain significant vulnerabilities in our infrastructure. We believe that software can and will play a large part in ensuring future resilience in the face of global disruptions, with an eye toward long-term sustainability and efficiency.