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a16z: Vertical SaaS - Now with AI Inside
How AI is increasing VSaaS revenue per customer by enabling vertical SaaS companies to take on tasks previously too complex for software

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The first wave of VSaaS, cloud, brought services online (e.g., Shopify for e-commerce, ServiceTitan for service workers). The second wave, cloud + fintech, increased revenue by enabling VSaaS companies to embed financial services within their software offerings. For example, by embedding payments, lending, payroll, and more, Toast is now at $1.5 billion ARR and makes over 80% of its revenue from financial technology solutions.