Vertical SaaS

This basket targets the Vertical SaaS theme, which delivers industry-specific cloud software platforms that embed deeply into specialized workflows, delivering higher retention, pricing power, and ROI than horizontal alternatives. The 20-name portfolio spans sectors including life sciences, restaurants, and other targeted verticals, with equal 5.2% allocations to top holdings Veeva Systems (VEEV), Toast (TOST), and Olo (OLO), each carrying an exposure score of 68. The investment logic rests on structural tailwinds: the vertical SaaS market reached approximately $143 billion in 2026 and is projected to grow at a 16.3% CAGR through 2035, outpacing the broader SaaS market as domain expertise, proprietary datasets, and embedded AI enable mission-critical solutions that displace legacy systems and drive outsized outcomes—vertical players are up to 3.3 times more likely to become financial outliers.

Key risks include sector-specific cyclical exposure, such as restaurant traffic and consumer spending pressures affecting restaurant-focused names, alongside broader SaaS dynamics like potential AI-driven internal tool-building that could pressure churn or pricing in less entrenched workflows. The highest-conviction position is Veeva Systems, the dominant cloud provider for life sciences with leading solutions in CRM, regulatory, clinical, and quality management across a highly regulated, data-intensive industry; its sticky platform serves top pharmaceutical and biotech firms, commands premium economics with consistent high-20s net margins, and maintains a wide moat through compliance depth and workflow integration that competitors struggle to replicate.