Long/Short Equity, Deep Value, Growth
Contributor Since 2014
Husband, Dad, Entrepreneur, and Fisherman. Just trying to Live Like Jose' (Chesney). I founded, grew and exited a SaaS software company after building it to $100M+ along with a great team.
Summary:
Ran Ding of Norwest Venture Partners posted "The Rise of Vertical-Specific SaaS vendors" in January 2014 and noted that the vertical SaaS players were significantly more profitable and had significantly more efficient sales and marketing models.
Ran considered the following advantages of vertical SaaS:
I was curious about how this looks today as I'm both a SaaS investor as well as a SaaS founder/operator (of a vertical SaaS business).
To study the public comps, I made use of Bessemer Venture Parnter's cloud comp sheets as of the end of March 2015.
My methodology:
Here are the horizontal comps:
And the vertical comps:
Summary and conclusions (all commentary based on medians)
As an investor and as an entrepreneur, vertical SaaS looks like a much better model.
(From Bessemer Venture Partner Cloud Comp)
(Corrected June 1, 2015 - grammar and references)
Disclosure: The author is long ON MANY OF THESE CLOUD COMPANIES.
Additional disclosure: The author is a founder/operator of a vertical SaaS company and an investor in the space.