Why we invested in Lumary
Deep. Vertical. SaaS. It has a ring to it which is almost erotic. Then again maybe I have just spent too much time hanging out with developers and technology investors.
If you’ve been paying attention to technology businesses over the last decade or so, big winners like Salesforce, Oracle and SAP are probably at least vaguely familiar to you. But there is a new (well, newish) breed of SaaS companies that is taking on these Goliaths. Now more so than ever before we are seeing the emergence of vertical-specific software solutions, built to service a specific “vertical” or industry as opposed to being a solution which sits “horizontal” across industries. While the likes of those well-known systems mentioned above tend to be all encompassing, highly customisable solutions, this new wave of technology businesses aims to disrupt their older, less-specialized peers by doing one thing and doing it well.
Lumary provides end-to-end workflow software for aged and disability care providers. Its platform is used by leading care organisations to manage their entire business from client engagement all the way through to NDIS reporting and claims (for those of you that haven’t come across it, the NDIS is the Government’s new disability funding scheme). The business was founded by Joseph Mercorella and Matthew English who, apart from just being good blokes, previously ran a Salesforce systems integrations business that serviced public and private health care organisations. In this role they learned about the excruciating pain associated with retrofitting a horizontal solution like Salesforce into a vertical like disability care, a pain which by its very existence, sets the stage for the unbundling we see today.
During a road show for the 1995 IPO of Netscape, its CEO, Jim Barksdale, famously commented that there are “only two ways to make money in business: One is to bundle; the other is to unbundle.” Lumary sits at the forefront of this unbundling phenomenon. It has been built on top of the Salesforce infrastructure and provides a suite of specialist tools for organisations in its vertical. Of course, these organisations could customise Salesforce themselves, but Lumary has invested $millions in its solution and to put it simply, it’s a no brainer to licence rather than build. In what appears to be tacit acceptance of the indefensible approach of vertical SaaS platforms, CRMs like Salesforce allow businesses like Lumary to build their technology stack on top of their core infrastructure in exchange for a cut of the revenue ironically, but in a move that may well be strategic brilliance, facilitating the emergence of the businesses that threaten to unsettle their reign.
Arguably, the most disruptive technologies today are horizontal platforms. CRM systems, databases, social media, finance systems… and while most industries are consumers of these broader technologies, many have not been truly and profoundly disrupted. Vertical SaaS platforms go deeper. By combining several horizontal solutions and taking advantage of emerging technology stacks, they put together a novel vertical platform in a way that can overhaul entire industries and re-imagine how business is done in that vertical. What’s happened to retail is a good example of this. Every major retailer in the country has been using technologies in logistic, payments, data and other areas to drive efficiencies for just about all eternity, but it is only the resulting end to end stack that has facilitated the emergence of eCommerce. Retail today has an entirely reimagined customer experience with new supply chains and ultimately, new champions.
In my view, some of today’s best opportunities for value creation can be found at the intersection between existing horizontal technological platforms and industry verticals, particularly in traditional industries in ever more competitive markets. With tailwinds from the NDIS, changing Government funding policies, long term macro-trends within the Australian economy and renewed oversight and compliance regimes, Lumary is right where it needs to be to become the dominant deep vertical SaaS platform for aged and disability care providers.
Deep. Vertical. SaaS. It has a ring to it which is almost erotic. Then again maybe I have just spent too much time hanging out with developers and technology investors.
If you’ve been paying attention to technology businesses over the last decade or so, big winners like Salesforce, Oracle and SAP are probably at least vaguely familiar to you. But there is a new (well, newish) breed of SaaS companies that is taking on these Goliaths. Now more so than ever before we are seeing the emergence of vertical-specific software solutions, built to service a specific “vertical” or industry as opposed to being a solution which sits “horizontal” across industries. While the likes of those well-known systems mentioned above tend to be all encompassing, highly customisable solutions, this new wave of technology businesses aims to disrupt their older, less-specialized peers by doing one thing and doing it well.
Lumary provides end-to-end workflow software for aged and disability care providers. Its platform is used by leading care organisations to manage their entire business from client engagement all the way through to NDIS reporting and claims (for those of you that haven’t come across it, the NDIS is the Government’s new disability funding scheme). The business was founded by Joseph Mercorella and Matthew English who, apart from just being good blokes, previously ran a Salesforce systems integrations business that serviced public and private health care organisations. In this role they learned about the excruciating pain associated with retrofitting a horizontal solution like Salesforce into a vertical like disability care, a pain which by its very existence, sets the stage for the unbundling we see today.
During a road show for the 1995 IPO of Netscape, its CEO, Jim Barksdale, famously commented that there are “only two ways to make money in business: One is to bundle; the other is to unbundle.” Lumary sits at the forefront of this unbundling phenomenon. It has been built on top of the Salesforce infrastructure and provides a suite of specialist tools for organisations in its vertical. Of course, these organisations could customise Salesforce themselves, but Lumary has invested $millions in its solution and to put it simply, it’s a no brainer to licence rather than build. In what appears to be tacit acceptance of the indefensible approach of vertical SaaS platforms, CRMs like Salesforce allow businesses like Lumary to build their technology stack on top of their core infrastructure in exchange for a cut of the revenue ironically, but in a move that may well be strategic brilliance, facilitating the emergence of the businesses that threaten to unsettle their reign.
Arguably, the most disruptive technologies today are horizontal platforms. CRM systems, databases, social media, finance systems… and while most industries are consumers of these broader technologies, many have not been truly and profoundly disrupted. Vertical SaaS platforms go deeper. By combining several horizontal solutions and taking advantage of emerging technology stacks, they put together a novel vertical platform in a way that can overhaul entire industries and re-imagine how business is done in that vertical. What’s happened to retail is a good example of this. Every major retailer in the country has been using technologies in logistic, payments, data and other areas to drive efficiencies for just about all eternity, but it is only the resulting end to end stack that has facilitated the emergence of eCommerce. Retail today has an entirely reimagined customer experience with new supply chains and ultimately, new champions.
In my view, some of today’s best opportunities for value creation can be found at the intersection between existing horizontal technological platforms and industry verticals, particularly in traditional industries in ever more competitive markets. With tailwinds from the NDIS, changing Government funding policies, long term macro-trends within the Australian economy and renewed oversight and compliance regimes, Lumary is right where it needs to be to become the dominant deep vertical SaaS platform for aged and disability care providers.