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Buying a vertical SaaS platform?
Find out whether it can carry the add-on thesis.
Vertical SaaS diligence that tests the platform behind the market position
Diligence of industry-specific software platforms for buyouts, buy-and-build strategies, and growth investments.
Vertical SaaS companies win on how deeply they fit an industry’s workflow. That depth often comes from years of customer-specific features, integrations, and acquired products. We assess whether the platform can keep growing, absorb add-ons, and move into adjacent segments without the cost of every new customer rising.
What we find most often
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Tenant models that cost more as they grow.
A separate database for every customer gives strong isolation, but each new customer adds provisioning, schema migration, and hosting work. We look for the middle path on the AKF Scale Cube: a Z-axis split that groups customers into identical pods, with automated tenant setup.
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Hard-coded workflows that block adjacent markets.
Business rules written into code for the first vertical, with no configuration layer or feature flags, so expanding into a neighboring industry means rewriting rather than configuring.
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Legacy code still in production during a rewrite.
A contractor-built monolith that carries part of the traffic while newer services take over, doubling maintenance work. We build a technical debt balance sheet and check whether the roadmap reserves the 12–25% of engineering capacity AKF recommends for paying it down.
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Capacity that has never been proven.
Single-zone deployments, no formal load testing, and a disaster recovery exercise that keeps getting rescheduled, so nobody knows the platform’s real limits.
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No data across customers.
Without a shared reporting or warehouse layer, the company can’t see cohort trends or build the benchmarking and AI features vertical buyers increasingly expect.
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Unintegrated acquisitions.
Prior add-ons still on separate stacks, so the “platform” is several products under one brand. We map which functions should become shared services (a Y-axis split) and what consolidation costs before the next add-on.
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Embedded payments risk.
Revenue from embedded payments resting on controls and reconciliation that haven’t kept pace with volume.