SaaStr Annual 2024: How to Stand Out to Investors as a Vertical SaaS Company with defy VC

SaaStr Annual 2024: How to Stand Out to Investors as a Vertical SaaS Company with defy VC

1. How to Stand out to Investors as a Vertical SaaS Company Medha Agarwal General Partner defy.vc

2. We at defy.vc are big believers in vertical SaaS and that it will create the next trillion dollars of enterprise value

3. What we at defy.vc look for in vSaaS founders Single-minded attention on a specific, niche industry, and deep understanding of the workflows and core problems A keen product mind, seeking to create a business critical operating system An authentic dedication to the vertical and problem space, and ideally, first-hand industry experience Key Differentiators Experience and connections within the target vertical Finding those underappreciated niches (they still exist!) As always, ambition and character Read more at makecents.substack.com

4. There are good reasons to love vertical SaaS! Vertical SaaS versus Horizontal SaaS in Public Markets 1 Mean EV / LTM Multiple // Vertical 7.7x, Horizontal: 6.7x Mean EBITDA Multiple // Vertical: Vertical: 44x, Horizontal: 34x vSaaS products tend to be extremely sticky and can achieve high penetration within target vertical With the advent of AI, the potential for driving efficiency while also creating defensible IP is higher than ever. Proprietary data <-> proprietary models According to Pitchbook, around 4,500 vertical companies received funding from VCs 1 Euclid Ventures, “The Vertical SaaS Profit Premium”. https://insights.euclid.vc/p/the-vertical-saas-profit-premium

5. What we’re looking for in a vSaaS company Good market size, with adjacent opportunities Customers not overly concentrated, nor fragmented Real product depth that drives immediate ROI A buyer mindset of acute business need Opportunity to layer in financial services

6. THANK YOU! Building? Reach me at [email protected]!