Despite the firm's enthusiasm for vertical AI, Bessemer acknowledges that most startups in this space are still far from exit. The slow pace of IPOs and large M&A deals involving private, venture-backed software companies has led to a backlog of unicorns waiting to go public. Dholakia remains optimistic that the offering pace will pick up, likely by next year, as many software startups have delayed going public due to market contraction and the need to integrate AI capabilities.
Key takeaways:
- Bessemer Venture Partners has released its annual State of the Cloud report, suggesting that startups are moving away from legacy SaaS business models and embracing a new paradigm: vertical AI.
- Vertical AI is defined as applications that target high cost repetitive language-based tasks that dominate numerous verticals and large sectors of the economy.
- While the potential of Vertical AI is promising, most startups in this space are still a ways from exit, with a backlog of not-yet-exited unicorns amassing amid a sluggish period for IPOs and large M&A deals.
- Sameer Dholakia, partner at Bessemer, is optimistic that the offering pace will pick up, likely by next year, as there's a significant backlog of companies that are worthy of going public but are still private.