Flavors of SaaS - Fall 2022 Update
Allied Advisers updated our previously published Flavors of SaaS report, where we include an analysis across a select group of companies in each category comparing operational metrics across the two flavors of SaaS; Horizontal SaaS and Vertical SaaS. As advisors who have worked across both flavors, we see interesting differences. While Horizontal SaaS companies generally have larger TAM, Vertical SaaS companies can be more capital efficient and have better operational metrics making them better suited for middle-market funds. While there are category leaders in Horizontal SaaS, there are also a lot of opportunities in building targeted Vertical SaaS companies which can become leaders in their own vertical sectors. In today’s environment where capital efficient growth is being keenly measured Vertical SaaS companies offer compelling opportunities for investors and buyers.