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In 2023, 89% of executives and IT leaders agreed that Vertical SaaS is the way of the future. We agree and foresee Vertical SaaS becoming more and more prominent in 2024. With growth comes increased competition, which is why savvy Vertical SaaS providers will familiarize themselves with the Vertical SaaS trends that can help them stand out from the crowd.
We are going to explore the top Vertical SaaS trends—from AI integrations to impeccable customer service—that will help shape the top Vertical SaaS companies of 2024.
The Top Vertical SaaS Trends of 2024
- Acquisitions
- Embedded Fintech
- Infiltrating Every Industry
- Impeccable Customer Service
- Embracing AI and Teaching Customers to Do the Same
Acquisitions
Historically, horizontal SaaS—large, non-industry-specific platforms that cater to a broad audience (think Slack, Oracle, HubSpot, etc.)—have acquired smaller Vertical SaaS platforms and integrated them into their tech stacks. However, over the past few years, top names in the Vertical SaaS sphere have been the ones making acquisitions.
Fractal Software’s 2023 The State of Vertical SaaS report highlights how Vertical SaaS titans like Procore and Toast have been able to fully dominate the industries they serve (aka their verticals) by acquiring other Vertical SaaS that serve their industries to offer their customers a more robust solution.
The report highlights how ProCore expanded by acquiring Unearth Technologies:
For Procore, the acquisition strategically broadens its platform capabilities at a time of immense industry growth. Unearth’s expertise in GIS allows Procore to offer enhanced spatial functionality to its 15K+ customers as their projects scale in complexity. By layering Unearth’s mapping technology into its end-to-end construction platform, Procore can provide the visibility needed to keep stakeholders aligned as builds grow larger and more intricate. This deal demonstrates how M&A can enable companies to proactively augment their platforms and stay on the cutting edge, rather than reacting to industry changes.
And how Toast was able to expand into new markets with the acquisition of Delphi Display Systems:
With restaurants now juggling an average of seven service models, including drive-thru, takeout, and dine-in, Toast saw an opportunity to better serve these stretched operators. The acquisition accelerates Toast’s ability to make every part of a restaurant smarter and more connected. By deepening its support for customers who operate a drive-thru model, the platform can facilitate faster service, create operational efficiencies for ordering and the kitchen, and unlock new revenue opportunities for busy QSRs…Together, Toast and Delphi can reimagine quick-service and beyond. The acquisition showcases Toast’s commitment to becoming an end-to-end digital platform tailored for restaurants’ unique needs.
“We’ve seen an increase in vertical SaaS customers white label our recruiting solutions to fully own everything customers in their industries would need to operate,” says HiringThing V.P. of Product Colette Luke. “Today’s customers are becoming less and less inclined to use multiple SaaS tools. They want full platforms that can solve all their problems. Whether by white labeling or acquisition, we foresee Vertical SaaS continuing to expand their platforms’ multiproduct capabilities.”
Embedded Fintech
A rising overall SaaS trend is the concept of embedded payments, more commonly known as embedded fintech. SaaS solutions are integrating these payment options into their platforms rather than taking customers to separate payment gateways—and taking them off the platform.
Forward-thinking tech platforms started embedding financial interactions to increase their stickiness and decrease churn. It’s also a better end-user experience—embedded fintech saves time and makes financial transactions more convenient and faster for end users.
It’s been a strategy that’s paid off. 88% percent of companies implementing embedded finance increased customer engagement, and 85% say it helps them acquire new customers.
The other significant benefits that have seen software companies across all industries race to embed fintech solutions include new revenue streams, market expansion, enhanced competitiveness, and expanded team capabilities. Vertical SaaS providers should embed industry-specific fintech into their tech stacks to take advantage of all these benefits.
Embedded HR is Next
“Embedded fintech is taking off because every Vertical SaaS platform, regardless of industry, needs industry-specific financial solutions,” says HIringThing CEO Joshua Siler. “Every SaaS platform, regardless of industry, can also benefit from industry-specific HR solutions, which is why embedded HR is the next big Vertical SaaS trend.”
Hiring and retention have been top business challenges across industries over the last several years. Embedded HR—specifically embedded recruiting—can help end users combat those challenges right from their Vertical SaaS of choice.
Infiltrating Every Industry
“It may feel shocking, but automation has not yet permeated every industry,” says HiringThing's Director of Marketing, Joanna Campa. “We’ve seen this when trying to get ATS and employee onboarding adoption. Substantial sectors such as agriculture, construction, and transportation, are still—not in every case, but in many cases—very analog.”
Even in 2024, there are still many industries in need of digitization, and we predict many of the new up-and-coming Vertical SaaS providers whose names will become up there with the Procores and Toasts of the world will figure out how to bring technology in and transform those industries.
“There are a ton of successful companies reactively providing solutions that markets desperately need, and that's great" says HiringThing Director of Partner Development, Tevis Paxton. “But the truly innovative and top-tier technology providers are providing solutions that their markets might not even be aware they need. They find a way to make those solutions something their customers cannot turn away. Vertical SaaS platforms have the innate potential to transform complete industries in that way.”
Impeccable Customer/Partner Support
“Because they service a very specific user base, achieving success in the Vertical SaaS space demands a more profound commitment to ensuring customers realize their intended outcomes through product usage,” says HiringThing Director of Partner Success Noël Hancock. “This necessitates the implementation of a comprehensive and proactive client success strategy. To achieve this, it is crucial to invest in thorough implementation processes, continuous customer education, and exceptional support.”
Impeccable service helps prevent customer churn and has the transformative potential to convert customers into enthusiastic advocates for your product, which is crucial in niche markets Vertical SaaS serves (especially those dominated by legacy platforms).
“In the specialized markets that vertical SaaS serves, the influence of industry reputation and word of mouth holds the capacity to either propel or hinder your business,” says Hancock. “Say two platforms solve the same problems. The one with the stellar customer experience is always going to win.”
In vertical SaaS, success is contingent on more than just developing a robust, industry-specific product. It entails a deeper commitment to ensuring customers attain their desired outcomes with the product in use. A holistic approach involves strategic investments in thorough onboarding processes, continuous customer education, and unparalleled support.
“Taking support to the next level means supporting each customer or partner with a specific support plan tailored to their business goals,” adds Hancock.
Embracing AI and Teaching Customers to Do the Same
AI is experiencing a significant surge in prominence. Within two months of its release, ChatGPT accumulated 100M Monthly Active Users, establishing it as the fastest-growing software application in history and the company behind it, OpenAI, is poised to achieve a $1B run rate within the upcoming year.
Looking into 2024 and beyond, we anticipate substantial growth in AI-focused software, alongside the integration of AI functionalities into existing Vertical SaaS applications. According to Gartner, 70% of employees want AI solutions to assist them in areas such as mistake reduction, problem-solving, information discovery, and process simplification.
AI empowers SaaS companies to enhance product services, personalize content, and implement time-saving automation and facilitates a deeper, data-driven understanding of audiences. It is swiftly becoming the norm for SaaS applications, with 9 out of 10 companies investing in AI.
“Vertical AI, artificial intelligence designed to specialize in a specific industry or domain, will become a term we’re used to hearing, “ says HiringThing CTO Alex Luke. “Gartner found that by 2023, 85% of AI solutions by vendors will focus on industry verticals. “
Become an AI Thought Leader
“AI is still a relatively new field, and I truly believe that there’s going to be a large schism between those who embrace it and those who hold out,” says HiringThing CEO Joshua Siler. “Another differentiator will be the companies that not only embrace AI but lead the charge in responsible, thoughtful ways. Vertical SaaS platforms can put themselves onto a whole other playing field by offering AI solutions and helping their customers become AI best practitioners, showcasing the benefits to end users, and having meaningful conversations about how AI will affect their industries moving forward.”
What Do You Think?
Are you in the Vertical SaaS field? Do you agree with these takes? Do you think there are other prominent Vertical SaaS trends that haven’t been mentioned here? Let us know in the comments, or engage us on our X or LinkedIn accounts!
About HiringThing
HiringThing is a modern recruiting and employee onboarding platform as a service that creates seamless talent experiences. Our white label solutions and open API enable technology and service providers to offer hiring and onboarding to their clients. Approachable and adaptable, the Hiringthing HR platform empowers anyone, anywhere to build their dream team.
