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Vertical Software

Definition

Vertical software (or vertical SaaS) refers to software applications built to serve a specific industry or niche, as opposed to horizontal software that serves broad functions across industries. Examples include CRM for auto dealerships, scheduling software for dental practices, or property management platforms. Vertical software companies often serve as "system of record" applications that become deeply embedded in their customers' operations.

Context

In Ep. 20, Jake Colognesi describes vertical software as a key focus for Mamba Growth. He notes that the best vertical software companies are often founded by someone with direct industry experience — "there's a founder or a family member to the founder that has a business in the space that the software operates." Jake also highlights the embedded finance opportunity in vertical software: these companies can monetize payments, lending, and other financial products beyond their core software subscription.