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Building Winning Vertical AI Applications – Takeaways From The 2024 Montgomery Summit

At March Capital, we have been investing in vertical software for 10 years and have seen first-hand what it takes to win in these markets. In certain verticals (i.e., industry 4.0, healthcare, etc.), companies at times have struggled to find product market fit, build efficient GTM motions, and ultimately, to hyper-scale – characteristics found in top horizontal software companies (i.e., CrowdStrike, Snowflake, Datadog, etc.) today.

A common denominator across these struggling companies was a general resistance from their customers to adopt technology. We found that customers are oftentimes (i) dealing with unstructured data living across disparate systems and (ii) working with workflows tailored intricately to individual user preferences. The result? A need for bespoke software solution for each customer, which meant high friction and barriers to adoption. All in all, this meant breaking through $10 – 20M ARR was a challenge for entrepreneurs building for these markets.

However, we view things as different now given recent breakthroughs in AI. Our belief is that the ability to ingest unstructured data and address more complex tasks can not only meaningfully improve existing workflows, but also remove bespoke and manual processes entirely. For example, complete automation of document drafting process in the legal vertical or generating patient reports for clinicians in the healthcare vertical. In short, by automating processes entirely, AI can help capture a larger part of workflows, thereby significantly reducing costs, lowering barriers to entry, and increasing the pace of adoption.

Last month, we gathered four dynamic entrepreneurs – Eleanor Lightbody (CEO of Luminance); Wardah Inam (Founder & CEO of Overjet); Punit Soni (Founder & CEO of Suki); and Evan Smith (Co-Founder & CEO of Altana) – at The Montgomery Summit 2024 presented by March Capital in a panel titled “Building Winning Vertical AI Applications” to discuss their experiences and test our hypothesis.

Below we summarized the six main takeaways, touching on the above hypothesis as well as additional learnings around building in vertical markets:

  1. The historical challenges of building vertical software stem from the abundance of unstructured data and complex workflows lacking standard unified processes. This creates data siloes and inoperability challenges that typically confine software’s contribution to “small wins”.
    “The challenge in supply chain is you have all these data interoperability challenges… the breakthroughs in AI are enabling [data sets to come together, harmonize, and become actionable].” – Evan Smith (Co-Founder & CEO of Altana)
  2. AI can turn data challenges into a competitive advantage, as it allows founders to build compelling workflows and user experiences that, in turn, generate proprietary data.
    “If you can build a workflow that actually makes people want to use a product… they will adopt that workflow… a workflow that can make sense to a clinician, will create the kind of moat that can create the kind of data that will allow you to build more models.” – Punit Singh Soni (Founder & CEO of Suki)
  3. Every attractive vertical will be inundated with competition. This is a strong sign of market validation. Ultimately, user adoption is the primary metric that will determine the winner.
  4. The legal industry provides good examples of qualities that make for a strong candidate for vertical-specific LLMs – laborious, manual, and constantly changing processes, where accuracy is critical.
    “When you are working in the legal space, you have to make sure you are getting the answer accurate… for us, it was important that we built our own large language models that have been built off contracts from law firms and verified by the best lawyers in the world.” – Eleanor Lightbody (CEO of Luminance)
  5. The AI hype cycle has its pros and cons. It has raised awareness around AI’s potential and made it a board level discussion, but verticals that have historically lagged in innovation remain wary of AI shortcomings. Nonetheless, we are in the early innings and there is significant value to be captured especially in these under-digitalized industries.
    “Fear is causing some risk averse institutions to step back… but the technology is real, with or without the hype cycle when our customers first see our products their jaws drop… There is a lot of excitement in how these technologies will help industries that have not changed in a significant amount of time… and the impact is significant enough that even the most risk averse organizations are willing to change for it.” – Wardah Inam (Founder & CEO of Overjet)
  6. The idea that you cannot build big businesses in vertical markets is false. Many of these categories represent the foundation of the global economy – healthcare makes up 20% of the world’s GDP and supply chain underpins global trade. While previous hurdles allowed for only “small wins” in these verticals, new age platforms can capture a substantial amount of untapped value.


Our conversations at The Montgomery Summit 2024 reinforced our excitement around the opportunity set current advancements in AI are unlocking in historically under-digitalized verticals. Our most recent investments in Overjet and Luminance highlight two companies that we believe have the potential to become winners in their respective categories – in dental and legal.

Overjet is the only FDA approved platform to detect, outline, and quantify instances of oral disease in X-ray images with AI. Without Overjet, this process is manual, with doctors and insurers often reaching different interpretations on the same dental X-ray imagines. As a result, patients on average decline about half of treatments recommended by their dentist. Overjet’s platform introduces a new source of truth to the industry, trained on millions of oral disease cases and proven across multiple FDA studies to meaningfully improve the accuracy of almost every dentist leveraging the platform.

Luminance helps legal teams within an enterprise automate legal workflows (i.e., contract generation, negotiation, and analysis) with AI. Their platform distinguishes itself from the slew of workflow software solutions in the legal space with a proprietary LLM trained on 150M+ legal documents. Across its products, Luminance’s platform can save customers up to 90% of time spent on contract reviews.

More on fundraise details can be found here and here.

Both Luminance and Overjet show early indication of how much incremental value AI can create across verticals over traditional SaaS. While software was previously built as systems of record and workflow tools, AI can now automate these workflows entirely to deliver the actual work. This opens new markets for disruption, and in our view, creates an opportunity to build multi-billion-dollar platforms in historically under-digitalized verticals – even larger than systems of record themselves.

There are countless other categories (i.e., construction and architecture, prop tech, insurance, etc.) where we see similar compelling opportunities. If you are building in these or other promising verticals, we are eager to meet you!