Overall, public B2B companies are struggling, with growth falling to new lows. But that’s overall. The ones selling outside of tech? Many are doing pretty, pretty, well.
TL;DR: While most public SaaS companies are growing at 8-10%, the companies crushing it are those selling outside the tech bubble – restaurants, construction, logistics, and e-commerce. They’re growing 2-3x faster than traditional horizontal SaaS.
The Scoreboard: Q1 2025 YoY Growth Rates
🔥 THE VERTICAL DOMINATORS (25%+ Growth)
- Samsara (IoT/Logistics): 31% growth, $367M Q1 revenue
- Monday.com (Work Management): 30% growth, $282M Q1 revenue
- Shopify (E-commerce): 27% growth, $2.36B Q1 revenue
- ServiceTitan (Home Services/Trades): 27% growth, $216M Q1 revenue
- Toast (Restaurant Tech): 24% growth, $1.34B Q1 revenue
😐 THE HORIZONTAL STRUGGLERS (Single Digits)
- Salesforce (CRM): 8% growth, $9.83B Q1 revenue
- Zoom (Communications): 3% growth, $1.14B Q1 revenue
- Twilio (Communications): 5% growth, $2.89B Q1 revenue
🤔 THE EXCEPTION THAT PROVES THE RULE
- HubSpot (Marketing/Sales/Service): 23% growth, $617M Q1 revenue
The Pattern Is Clear: Vertical > Horizontal. At Least Right Now.
Case Study: Monday.com vs Asana – The Power of Non-Tech Customers
Want to see the “non-tech vertical” thesis in action? Look at Monday.com vs Asana.
The Numbers Tell the Story:
- Monday.com Q1 2025: 30% growth, $282M revenue
- Asana 2024: Single-digit growth, struggling with churn
Mostly Same Product Category, Mostly Different Customers
Both companies build “work management” software. Both help teams organize projects and collaborate. But their customer bases couldn’t be more different.
Asana’s Customer Base:
- Heavy concentration in tech companies
- Startups and tech-forward organizations
- Customers who already use 15+ SaaS tools
- Easy to cancel when budgets get tight
- Highly price-sensitive buyers
Monday.com’s Customer Base:
- Manufacturing companies
- Construction firms
- Marketing agencies
- Non-profit organizations
- Healthcare providers
- Real estate companies
The Difference? 70% of Monday.com’s customers aren’t in tech.
When a construction company implements Monday.com to manage their projects, job sites, and crew scheduling, they’re not “optimizing their 47th SaaS tool.”
They’re digitizing their core business operations for the first time.
Result?
- Higher switching costs: Construction workflows are complex and mission-critical
- Less price sensitivity: The ROI is obvious when you’re replacing spreadsheets and paper
- Lower churn: These companies don’t have “SaaS fatigue”
- Expansion revenue: Once they see the value, they add more use cases
Meanwhile, Asana’s tech company customers are getting budget cuts, consolidating tools, and asking “do we really need another project management platform?”
The Lesson: In 2025, customer composition matters more than product features.
Monday.com isn’t winning because their product is dramatically better than Asana’s. They’re winning because they’re selling to industries that are hungry for digital transformation, not saturated with SaaS tools.
For founders: Don’t build a better Asana. Build the Monday.com for your industry.
Why “Non-Tech” Verticals Are Winning
1. Tech Budgets Are Getting Slashed
CFOs at tech companies are auditing every SaaS tool. The “productivity software” that seemed essential in 2021 is now getting cut.
Meanwhile, a trucking company isn’t going to stop using Samsara’s fleet tracking because of interest rates. A restaurant isn’t dropping Toast’s POS system to save money.
The insight: Mission-critical infrastructure in non-tech industries > nice-to-have productivity tools in tech.
2. Less Budget Being Routed to AI Initiatives (For Now)
Tech companies are pouring massive budgets into AI initiatives – new models, AI infrastructure, prompt engineering teams. Every dollar going to “AI transformation” is a dollar not going to traditional SaaS tools.
Non-tech industries? They’re not there yet. A plumbing company isn’t hiring a Chief AI Officer. A construction firm isn’t building an AI lab.
Result: Non-tech companies are still buying traditional SaaS solutions while tech companies redirect budgets to AI experimentation.
The window: This won’t last forever. But for 2025-2026, non-tech verticals have less AI distraction competing for budget dollars.
3. Digital Transformation Just Hit Non-Tech Industries
Tech companies have been “digital first” for decades. But restaurants, logistics companies, and construction firms? They’re just now making the move from spreadsheets and clipboards to software.
ServiceTitan’s numbers tell the same story:
- 27% Q1 growth
- $772M ARR
- ~9,500 customers (18% growth)
- Serving HVAC, plumbing, electrical, pest control
Samsara’s numbers tell the story:
- 31% Q1 growth
- $1.46B ARR
- 36% increase in $100K+ customers
- Serving trucking, construction, oil & gas
These aren’t companies optimizing their 47th SaaS tool. These are companies buying their first real software platform.
4. Regulatory Requirements Create Infinite Moats
Try switching away from Toast when you’ve got 50 restaurant locations with integrated POS, payments, payroll, and compliance systems.
Try replacing Samsara when it’s monitoring your entire fleet for DOT compliance.
Try ripping out ServiceTitan when it’s running your entire HVAC business – from lead generation to invoicing to payroll.
Horizontal SaaS: Easier to rip out when budgets get tight
Vertical SaaS: Often cannot be removed without breaking the business
5. Lower Competition = Higher Prices
In horizontal markets, you’re competing with 47 project management tools.
In vertical markets, you might be the only serious option. Toast can charge restaurant-specific pricing. Samsara can charge for specialized fleet management features. ServiceTitan can charge premium rates for trade-specific workflows.
The math: 3-5x higher prices × lower churn × faster growth = vertical SaaS goldmine
What This Means for SaaS Founders (By Stage)
If You’re Pre-Product:
BUILD FOR NON-TECH VERTICALS
The opportunities:
- Healthcare (still using fax machines)
- Manufacturing (still using Excel)
- Agriculture (massive and underserved)
- Real estate (fragmented and inefficient)
- Legal (drowning in paperwork)
- Home services (ServiceTitan is just scratching the surface)
Don’t build:
- Another Slack competitor
- AI-powered project management
- Developer tools (oversaturated)
If You’re Early Stage ($0-$2M ARR):
Choose your vertical carefully
The winners have:
- Heavy regulatory requirements
- Life-threatening consequences if software fails
- Complex, multi-step workflows
- High switching costs
Monday.com’s lesson: Even “horizontal” work management wins when it goes deep on specific use cases and industries.
If You’re Growth Stage ($2M-$20M ARR):
Go deeper, not wider
Toast could have built generic retail software. Instead, they went ALL-IN on restaurants:
- Restaurant-specific POS
- Restaurant-specific payments
- Restaurant-specific payroll
- Restaurant-specific marketing
Result: $5B revenue growing 27% while most horizontal SaaS struggles.
If You’re Late Stage ($20M+ ARR):
Acquire vertical specialists
Shopify’s playbook:
- Started horizontal (e-commerce for everyone)
- Acquired vertical specialists
- Built industry-specific features
- Now owns entire verticals
The Uncomfortable Truth About Horizontal SaaS
The horizontal SaaS golden age is over. At least, the pre-AI versions.
Salesforce growing 8%. The company that defined SaaS is now a mature, slow-growth utility. Zoom is no longer growing.
Meanwhile, Samsara (IoT for logistics) is growing 33%.
Why?
- Saturation: Every tech company already has CRM, project management, and communication tools
- Commoditization: Horizontal features get copied instantly
- Price pressure: Easy to compare and switch between similar tools
- AI disruption: ChatGPT can probably replace half the horizontal SaaS tools out there
The new rule: If a general-purpose AI can do 80% of what your horizontal SaaS does, you’re in trouble.
Predictions for H2 2025 and 2026
1. Vertical SaaS Acquisition Spree
Horizontal platforms will pay massive premiums to acquire vertical specialists.
2. “Industry Cloud” Becomes Standard
Every major SaaS company will launch industry-specific versions of their platform.
3. The Great Horizontal Shakeout
50% of horizontal productivity SaaS companies will either pivot vertical or get acquired.
4. AI Accelerates Vertical Specialization
AI makes it easier to build industry-specific features, lowering the barrier to vertical SaaS.
The Bottom Line
The SaaS companies winning in 2025 aren’t selling to other SaaS companies.
They’re selling to:
- Truckers who need fleet management (Samsara)
- Restaurant owners who need POS systems (Toast)
- Online merchants who need e-commerce platforms (Shopify)
- HVAC contractors who need business management (ServiceTitan)
- Teams who need work management (Monday.com)
The pattern: Find an industry that’s been ignored by tech, build something they literally cannot live without, and charge accordingly.
The opportunity: There are thousands of industries still running on Excel and paper. The companies that digitize them will be the next generation of SaaS winners.
If you’re building horizontal SaaS in 2025, you better have a damn good reason why AI won’t eat your lunch.
If you’re building vertical SaaS for non-tech industries, you’re playing in the only game that matters.
Choose wisely.
