
These Are the Top Emerging Vertical SaaS Companies
We are highlighting the most promising early stage vertical SaaS companies based in the U.S., across a variety of industries.
Who is building a superior user experience of tomorrow? BCV explores where the future CMS winners will emerge.
This analysis includes:
In August 1991, computer scientist Tim Berners-Lee created the very first website, a simple page that displayed content on, fittingly, how to build a website. He unleashed a revolution: today, there are over one billion websites globally and almost two hundred websites are created every minute. As websites have exploded, so too has digital content. Text, imagery, videos, and other forms of digital content have proliferated and grown in sophistication over the past three decades, catalyzing multiple waves of innovation in the underlying content management systems (CMS) that organize the internet’s content.
We at BCV are excited about the latest incarnation of CMS technology defined by MACH architecture (Microservices based, API-first, Cloud-native SaaS, and Headless). Colloquially, the next generation of CMS is still referred to as “headless.” Practically, it is much more than that: not only is it architected to separate website front and backends (hence “headless”), it also introduces novel data storage techniques and workflow tools that dramatically improve a company’s ability to deliver great digital experiences. “Composable” is a more appropriate label for the emerging generation of CMSs than headless, capturing the breadth of flexibility that they enable.
We believe the emerging generation of CMSs built upon MACH principles will not only bring a superior experience to their users, but will also redefine what it means to be a CMS by unlocking new capabilities, such as hyper-personalization. In this piece, we will share a brief history of the CMS market, the tailwinds driving growth in the space today, and our outlook for the future. We at BCV are excited to back the next generation of founders disrupting content management and personalization tools, building upon our history supporting important companies like Optimizely and Bloomreach.
Starting with the creation of the traditional monolith CMS in the 1990s (“monolith” referring to coupling of the frontend and backend of the CMS) and proceeding with the rise of headless CMS in the past decade, the fundamental role of the CMS has been to store and render content online. Headless CMS platforms, which decouple frontend presentation from backend content management, allow businesses to store, manage, deploy, and reuse content across any end interface. Traditional CMSs were built with a static website in mind; they were not designed to publish and reuse dynamic content across web, mobile, and other devices. Omnichannel publishing and increased content velocity have driven businesses to seek out more modern web development stacks.
While first-generation CMS platforms were primarily developer tools, newer platforms have differentiated themselves by targeting various end user personas, including both technical users and business users (often marketers, but also designers), to allow for increased collaboration and efficiency in publishing content.
Four major waves have defined the evolution of CMSs:
Wave 1: Monolith CMS
In the early days of the web, monolith CMSs emerged to manage and publish content, an advancement relative to static website builders that stored content in HTML files. These platforms provided an all-in-one solution that combined frontend user experience and backend administration. Monolith CMS pioneers are WordPress (an open source CMS released in 2003 that now underpins an astounding 42% of all websites), Drupal, and Joomla.
Wave 2: Digital Experience Platform (DXP)
As the mobile web developed and enterprises placed larger emphasis on digital experiences for deeper customer engagement, DXPs arose as full-stack enterprise suites combining multiple products, such as CMS, Digital Asset Management (DAM), Customer Data Platforms (CDP), and Business Intelligence (BI). DXPs’ value proposition was to leverage customer data to deliver omnichannel marketing and personalized, content-driven experiences. Leaders of the DXP wave include Adobe Experience Manager, Optimizely, Acquia, and more.
Wave 3: Headless CMS
In the past decade, omnichannel demands, content proliferation, and publication frequency revealed weaknesses in existing solutions. As monolith CMSs struggled to provide the speed and agility valued by modern companies, and DXPs catered to enterprises with complex needs, headless CMS platforms like Contentful and Contentstack emerged to provide a superior technology experience to a broader array of customers.
Initially, headless CMS players found product-market fit with SMBs who were nimble enough to adopt this new technology. Gradually, enterprises became interested in the headless trend too. By migrating from monolith or DXP to a headless approach, enterprises could choose best-in-breed point solutions while maintaining an agile, streamlined process with shorter implementation times and lower costs. The adoption of headless CMS accelerated as companies of all sizes realized the importance of delivering high-quality digital experiences across multiple endpoints. Headless CMSs have steadily gained share as they have displaced monolith CMSs and DXPs.
Wave 4: Modern CMS (Headless + Composable)
As Contentful and Contentstack gained traction and began serving enterprise customers, they became proficient at supporting complex organizations with a fully-featured product and pricing model that reflected their upmarket positioning. Other segments of the market, especially those too modern for legacy solutions and too small to pay enterprise price points, felt underserved by their CMS alternatives. Somewhat counterintuitively, however, the fourth CMS wave is not characterized by price disruption or purpose-built platforms for SMBs.
The modern CMS is defined by a focus on product usability and flexibility. Emerging players cater less to size segments and more to end user personas – developers, marketers, designers – who live in the platforms day-to-day. Storyblok, for instance, has introduced an industry leading, intuitive visual editor, empowering marketers to edit websites without consuming developer resources. Similarly, Builder.io enables drag-and-drop functionality on a permissioned basis so that business users can modify components as needed. Sanity espouses a “content as data” framework that provides a single source of truth for every data element, allowing maximum flexibility from a development standpoint. Open-source platforms like Strapi and Payload allow for unconstrained developer customization as well. The idea of composability – making web design a true blank canvas – is the throughline of the modern CMS players.
We believe modern CMS players are well positioned to gain share as they compete against first-gen headless CMSs and DXPs. Meanwhile, complementary innovation in other parts of the web development stack is fueling the momentum of headless CMSs. The popularity of Vercel, a platform for frontend developers that allows for efficient, developer-friendly deployment and hosting, and Commercetools, which empowers companies to create highly customizable online commerce experiences, reinforces the benefits of migrating to a modern architecture.
Taking a step back, headless CMS is still in the early stages of its adoption cycle, representing only 20-35% of the CMS market today. There is significant runway to penetrate its most directly applicable industries, namely e-commerce, media, and entertainment, before expanding in slower-to-adopt verticals like healthcare and government.
While headless CMSs have steadily gained traction over the past decade, we believe that several trends will fuel growth in the coming years. Some of the tailwinds driving growth in the overall headless CMS space include:
Modern headless CMS tools are well positioned to gain share in the CMS market as a result of their:
Today’s companies are recognizing a need to deliver complex, personalized, dynamic content across a growing array of channels, without sacrificing speed and without making outsized demands on scarce developer resources. As a result, we believe that the shift towards headless CMSs will accelerate, and that modern headless CMSs will gain disproportionate share.
The headless CMS movement originated in Europe. Contentful coined the term “headless CMS” in Berlin, Storyblok emerged in Linz, Sanity in Norway, Strapi in Paris, and Hygraph in Berlin. A few factors might explain why European companies have led the headless CMS shift:
We expect acceleration in the modern CMS market in the coming years, fueled by the continued proliferation of more complex content, constraints on developer resources, and desire for personalization. Within its initial core industries – e-commerce and media – the benefits of a modern CMS are well understood. Adoption and awareness will continue to snowball outside of these industries, as modern CMS is applicable to any business with a website. Powerful add-on tools that integrate seamlessly into a headless stack will continue to emerge and gain traction, reinforcing the benefits of a MACH architecture. Over time, the market will continue to shift from monolithic to headless to modern architectures as the latter becomes the default. Just as “software” has come to imply cloud, CMS will soon imply headless: the old way will become the exception to the rule.
Modern CMS is not a ‘winner-takes-all’ category. The diverse needs of end customers will translate into multiple winners. Given the size, growth, and nuance of each segment, we believe several players can ride the tailwind and find success in this ecosystem.
As we look ahead to the next chapter in the CMS story, we see a transformative opportunity in hyper-personalized content generation. Targeting has been the most important theme in marketing in the last decade, but the coming decade will be defined by personalization. Web pages will adjust content depending on who arrives at a given site, via which channel, when, and with what intention. First movers in this category – such as Mutiny, a no code web personalization platform that powers higher conversions by catering content to unique audiences, or Ninetailed, an API-first headless personalization tool that similarly fuels conversion through customization – will become important players in the “personalization stack.”
Dynamically personalizing content with AI is a natural extension of CMSs’ core capability of storing and rendering content. On the back of rapid advancements in generative AI in recent months, software companies are racing to layer on AI-powered functionality, unleashing exponential growth in content creation in the process. We believe that modern CMSs have the opportunity to provide the connective tissue between staid content management and the new age of personalization, creating new profit pools for businesses and superior experiences for consumers.
We would love to learn from other founders, investors, and operators in the MACH community. Please feel to reach out to Merritt, Kristie, Pascal, or Abby if you have ideas or feedback.
We are highlighting the most promising early stage vertical SaaS companies based in the U.S., across a variety of industries.
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