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Day: May 7, 2024

Top Early-Stage Vertical SaaS Markets

Posted on by York IE

By Luke Sophinos and Matt Shapiro

In our last report, we examined growth equity investors’ interest in vertical SaaS companies. To get to that point, companies first must navigate the landscape of early-stage venture capital. So today we’re looking at recent VC investments by vertical at the Pre-Seed, Seed and Series A stages.

New software, new technologies and AI are applicable across all industries, but each industry is not primed for the same amount of explosive growth and digital disruption. So what are the market factors that early-stage investors are looking for in vertical SaaS companies? Let’s take a look at them, plus some examples from York IE’s portfolio:

Inefficiency and High Costs: Industries that have high operational costs, inefficiencies or waste in their processes are prime targets for software that can address those problems. Science on Call acts as automated IT support for fast casual restaurants. The restaurant industry has massively inefficient troubleshooting processes for their in-store technologies, with every minute of downtime creating significant revenue loss.

Data Volume: Industries that generate or rely on large volumes of data can benefit significantly from software that can help with data management, analysis and decision-making. RealSage is helping multi-family residential property managers/owners connect all their internal and external data systems in one place to better use all their property data for real-time decision-making.

Regulatory Changes and Complexity: Industries with new or complex regulatory requirements may benefit from software that simplifies compliance, manages risk and ensures adherence to laws and regulations.

High Transaction Volume: Industries that handle a high volume of transactions daily (such as banking or retail) are ideal for software that can automate processes, reduce errors and improve customer experiences. Vend sells software to commercial parking garage operators to help them manage the constant incoming flow of cars coming in and out of large garages every day. No more stacks of paper tickets!

Fragmentation: If an industry is highly fragmented with many small players instead of a few large ones, software can provide tools that help smaller companies compete more effectively.

Technological Lag: Industries that have been slow to adopt new technologies present opportunities for transformative software that can introduce significant advancements in efficiency and effectiveness. BlueTrace brought digital traceability to the centuries-old shellfish industry, where pen and paper tags were the preferred method for tracking products through the supply chain.

Customer Demand: Changes in customer expectations, such as a demand for faster service, more customization, or online availability, can drive the adoption of new software in an industry.

York IE has teamed up with Luke Sophinos, a leading voice on vertical SaaS at lukesophinos.com and the founder and CEO of one of the largest vertical SaaS businesses for trade schools in the U.S., CourseKey, to compile the below list.

It includes some of the verticals where early-stage U.S. startups raised the most funding in Q1, along with some SaaS highlights in each industry. All of the below data comes from Fuel, York IE’s market research platform.

Cannabis

$109.6 million

 Kiefa: provider of software for cannabis producers

$2 million Seed
Hoodie Analytics: cannabis pricing, promotion and sales insights

$1.5 million Seed
Pollution Control

$43.9 million

 Sprih: enterprise sustainability platform

$3 million Seed
Cedara: carbon intelligence platform

$1.5 million Seed
Legal Tech

$41.6 million

 Draftwise: contract negotiation platform

$20 million Series A
OneNotary: online notary infrastructure for SaaS

$5 million Series A
Construction

$37.2 million

 PermitFlow: permit application and management platform

$31 million Series A
Arch: HVAC sales software

$6.2 million Seed
Government Tech

$31.2 million

 Abstract: policy impact analysis platform

$4.3 million Seed
Inquisio: platform for the public to access government data

Undisclosed Pre-Seed round
Retail Tech

$26 million

 Symbiosys: next-generation retail media platform

$9 million Series A
Competera: data-based pricing platform

$3 million Seed

Inside the Growth of York IE India

Posted on by Kyle York

From the earliest days of York IE, we knew we needed to develop competency in technology, data and research to achieve our vision.

When looking for engineering support on the consulting marketplace Upwork, our CTO Mike Veilleux met a full-stack developer from Ahmedabad, India named Kalrav Parsana. They immediately hit it off. And the more that Kalrav completed high-quality work, the more work we sent his way — so much so that he needed to bring on additional resources.

Kalrav eventually formed his own company, All Cloud Works Technologies, to accommodate all these requests. Kalrav and the initial team were instrumental in building our York IE strategic growth platform, Fuel, a resource for startup founders and operators everywhere.

York IE’s dev demands began to evolve beyond our own company and expand to our Labs and portfolio companies. Kalrav grew his team to eight talented developers and six clients, including us. We loved the relationship, but we couldn’t shake the feeling that it was short-sighted and a bit transactional.

So we decided to really go for it and proposed an acquisition. Kalrav was thrilled, as were we.

We legally became York IE APAC Limited in India, with Kalrav, Mike and myself serving as board directors. Our CFO Janelle Gorman spearheaded a tremendous amount of work to make this happen. We integrated and launched a first-class York IE product development service in May of 2022, hired Evan York stateside to help lead the product strategy team, and the rest is history.

Fast forward to today:

  • We have over 150 talented York IE employees and contractors in the region.
  • We recently moved into our new 25,000-square-feet office.
  • We’ve aligned U.S.-based product strategy, architecture, data science, revenue and client services to partner with our clients.
  • We’re adding cross-functional resources in India to support other practice areas and our own core business.

None of this would be possible without the great work of Kalrav Parsana and the team he has built. That’s why I’m so excited to announce his promotion to vice president, India operations. Kalrav has been playing this de facto leadership role from day one, but with our scale and maturation, he has more than earned this official evolution to our executive team!