Trevor Lunsford is a mergers and acquisitions professional who brings combined investing and advisory experience to the vertical software landscape. Beginning his career at District Capital Partners, he has progressed into leadership roles at a Washington, DC based investment banking firm, where he now serves as Director. His work has centered on industry specific and application SaaS platforms, including GovTech, public safety, eCommerce, healthcare IT, MarTech, and EdTech. Across these segments he has supported private equity investors, led transaction execution, and helped expand a focused vertical SaaS strategy. Drawing on a background in finance from Georgia State University and hands on exposure to capital raising, mandate sourcing, and deal management, he offers a practitioner’s view of how specialized software platforms create opportunities for investment banking firms.
Vertical Software Opportunities in Investment Banking
A 2025 Yahoo Finance article reported that the vertical software industry is growing in response to a need for workflow tools that enhance efficiency and productivity. The sector has attracted considerable interest from investment banking firms, with advisory firms targeting industry-specific SaaS (Software as a Service) platforms. Vertical software investing has become attractive to investors due to the specific applications and workflow efficiencies achieve with vertically oriented capability vs. horizontally “general” applications.
Vertical software refers to technological products that serve a specific industry, such as those mentioned above. The software is vertical because it meets the specific needs of a particular industry, unlike horizontal software, which has tools that cater to businesses across various industries. This particular software has become a fixture in business because it customizes tools to align with industry needs. In healthcare, for example, organizations require software that protects data and ensures compliance with privacy laws. A vertical software platform in healthcare will include tools that ensure the organization remains compliant with privacy regulations.
Increasingly, the vertical software market is shaping the investment industry, namely because it offers stable customer bases and predictable revenue. It also offers investment banking firms the potential to benefit from cross-sell opportunities, such as payments, lending, and AI. Ultimately, the sector is attractive to strategic buyers and private equity firms seeking to establish a dominant presence in a niche market.
Moreover, vertical software innovation has become increasingly attractive, primarily because the market has not yet matured and there is ample opportunity to gain from investing in vertical software firms. While innovation drives much of modern industry, many businesses operate without industry-specific software, making for a fertile investment landscape. Furthermore, in venture capital investing, many investors avoid placing capital in areas outside their expertise or knowledge, or they avoid technologies that cater to a small, niche market, prematurely dismissing the potential investment in vertical software companies. Ultimately, this avoidance leads to more investment opportunities.
Industry experts also argue that vertical software has promising scalability and go-to-market potential. Not only do these companies provide software unique to specific industries, but they also offer users best-in-class software that addresses challenges in current workflows. Because the technology is unique to a specific industry, it is easier to sell than software that caters to a broad range of industries, which makes for more efficient marketing and sales. Furthermore, vertical software startups engender loyalty among their customers, facilitating word-of-mouth marketing. Vertical software offers investors the chance to benefit from a sector that grows organically, creating a robust network and nonlinear growth.
Additionally, the innovation presents investors with potential returns on product expansion. Vertical software firms can add additional products to their menu of offerings, which opens new market opportunities, speeds up sales, and enhances the user experience. These wedge products are tools with unique features. They are typically introduced in a crowded market, designed to make the company stand out, and serve as a catalyst for momentum within the market.
The investment banking community has leveraged the vertical software startup landscape as a greenfield of opportunity in which to provide advisory services. Firms have expertise in advising these companies on topics related to mergers and acquisitions, as well as growth capital. Investment banks can also serve as conduits for raising capital by connecting vertical software companies with private equity and venture capital firms. These firms can help vertical software companies scale into new industries. Finally, private equity-backed platforms and large software companies regularly acquire vertical software companies as part of expanding their portfolios.
About Trevor Lunsford
Trevor Lunsford is a Director in mergers and acquisitions with experience across investing and advisory roles focused on vertical and application SaaS businesses. His background includes expanding a firmwide vertical software strategy, managing deal execution, and supporting leading private equity sponsors in sectors such as GovTech, public safety, eCommerce, healthcare IT, MarTech, and EdTech. Educated at Georgia State University with both bachelor’s and master’s degrees in finance, he also mentors junior team members and maintains personal interests in hiking, fitness, motorsports, and international travel.
