There’s a part of the software market right now that doesn’t quite fit anywhere.

For years venture capitalists have built their models and priced for hypergrowth – meaning the companies they back need to double or even triple in size year-on-year.

But if you look at the software market as a whole, this only accounts for a tiny minority of all businesses. Many SaaS businesses scale steadily at 30%+ a year, delivering healthy growth by most standards but failing to hit the benchmarks VCs price for.

Private equity, on the other hand, has traditionally gone after businesses that are already profitable, cash-generative and stable enough to carry debt. So those same 30%+ growth businesses often appear too early, too lean, or not yet profitable enough for the classic PE playbook.

The result is that some promising companies no longer qualify for venture funding but also don’t tick the boxes for traditional private equity.

For founders, this means being stuck between fundraising rounds, forced into an endless grind. For investors, it’s a challenge too. Roll-up companies or trade buyers may offer exits, but the risk is that this ends up becoming a sort of ‘Bermuda Triangle’ of software investing, into which companies disappear and never resurface.

Identifying market leaders in waiting

We believe these businesses can be a source of great opportunity.

Many have proven they can grow, are close to break-even and, thanks to their recurring revenue models, don’t require the safety net of a large profit margin. With the right support, they can scale far more efficiently than a “shoot for the moon” venture play or a leveraged PE deal – with the potential to become market leaders in a few years.

While not every growing software company is a market leader in waiting, if investors do their homework and dive into the detail, it’s possible to spot those with real untapped potential.

Strong financials, operations, and customer base are all important, but for us, the key is identifying an amazing product. That means having a modern tech stack and either be operating in a market with clear white space to grow into, or one dominated by legacy competitors, so there is a path to grab market share.

A different investor mindset

Delivering on this potential also requires a different kind of investor mindset: a willingness to spend time identifying and working closely with a smaller number of companies, rather than relying on deal volume to increase the odds of picking winners or waiting for market momentum to solve problems.

It also means identifying which of the five key B2B software growth levers will have the biggest impact:

1. Driving sales growth
2. International expansion
3. Building an acquisition strategy
4. Adopting AI
5. Prioritising customer success.

Not every company needs support in all five areas. Some are already international, others have a strong go-to-market but need capital or sales acceleration.

This is where being an investment partner rather than just a capital provider matters. These companies need more than passive counsel – they need focused, hands-on support to get growth and profitability motoring.

When we get this right, it brings a renewed sense of momentum for founders and teams.  A SaaS company growing 30%+ today may not have the moonshot potential VCs look for, but with the right product, timing, strategy, and backing they can become market leaders within two to three years. And then there’s no stopping them.

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