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🔧 For a while, many venture investors avoided vertical software because they felt its comparatively small markets would not produce target VC outcomes. That has of course changed in recent years, and CRV does a nice job of outlining why. They use the example of auto repair software – with 167k auto repair shops in the US and the lower priced players charging $2.7k a year, you conservatively have a ~$440M TAM (not the $1B+ venture gets excited about). But over time these software are able to further specialize and innovate within their verticals, both creating more solutions (more things to charge for) and improving their current offerings (giving them the ability to charge more), thus growing their TAM. What CRV is most excited about in vertical software is embedded commerce. Using the same example, embedded commerce would be selling auto parts directly through auto repair software, putting your website, booking system, POS, etc. all in one place.
