Industry Analysis
The vertical SaaS goldrush in 2026
Why "AI for [boring industry]" is the most-funded SaaS category right now.
Neil Brookes Updated 2026-06 6 min read
The thesis
Horizontal SaaS (one product for everyone) is saturated. Vertical SaaS (deep product for one industry) has multiple structural advantages: less competition, deeper integration, customer pricing power, defensible AI training data. Investors agree — vertical SaaS took ~40% of 2025 SaaS funding vs ~20% in 2020.
What's working in 2026
- ServiceTitan (HVAC, plumbing) — $9.5B IPO
- Squire (barbershops) — $750M valuation
- Toast (restaurants) — $20B+ market cap
- Procore (construction) — $13B market cap
- Veeva (life sciences) — $30B+ market cap
The 2026 vertical SaaS playbook
- Pick a vertical with 100k+ SMBs and no dominant SaaS player
- Spend 90 days inside the operation (literally — work alongside customers)
- Build the workflow they actually do, not the workflow they should do
- Embed payments early — that's where the long-term margin comes from
- Add AI for the repetitive parts (data entry, customer comms, scheduling)
- Sell direct in year 1, channel partnerships in year 2+
Industries still underbuilt
- Independent insurance brokers
- Wedding venues + event planners
- Funeral homes
- Independent pharmacies
- Auto body shops
- Pool services + landscapers
NB
Neil Brookes
Founder, SMBs.com
Building SMBs.com — the free directory of every small business worldwide. Previously: founder + operator at FIH Inc, focused on small-business M&A advisory.