Vertical SaaS companies catering to specific industry needs are booming. However, a lot of these companies are struggling to convince prospective investors of their potential for explosive growth. To understand how to pitch their growth to prospective investors, companies need to understand the investor's perspective.
Investors need data to assess the potential of the business. While core SaaS metrics such as Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLTV) remain crucial, investors would like to delve deeper into vertical SaaS companies.
Before diving into the metrics, they would like to understand the landscape of the industry vertical and see if the industry has a sizable addressable market. Even a large yet fragmented market with numerous small players indicates potential for high customer acquisition. They would also want the companies to demonstrate a deep understanding of the industry and customer pain points and showcase how their solution is going to solve that problem.
While metrics such as CAC, LTV, and ARPU showcase the effectiveness of the business in its current stage, investors would also like to assess if the vertical SaaS is truly scalable. Metrics that showcase the value added to industry verticals become key for assessment. Taking construction vertical SaaS as an example, metrics such as reduction in project completion time, percentage reduction in project costs, reduction in safety incident rates, and reduction in rework rates showcase the potential of the product in the vertical.
Beyond the numbers, companies need to showcase the team’s industry expertise and their ability to understand the specific needs of the target market. They can also present early customer success stories and testimonials to demonstrate the tangible impact of the solution.
Effectively addressing these elements and weaving them into a compelling narrative will help vertical SaaS companies capture the attention of investors and secure the funding needed to fuel their growth journeys.