Our thesis
The value beneath the software interface.
AI is making B2B software more powerful and increasingly embedded in how businesses operate. We focus on the characteristics that allow software businesses to create and compound value over time, across both horizontal and vertical markets. Our framework evaluates these characteristics across eight areas.
Our lens
What makes software valuable.
The strongest software businesses become deeply connected to how their customers operate. They accumulate years of customer data, encode valuable workflow knowledge, connect to critical systems, and become part of the way work gets done.
That is particularly powerful when the software sits inside an important workflow – managing orders, compliance, payments, production, or something else the customer relies on every day.
We look for this kind of embedded software, across both vertical and horizontal markets.
AI is making software faster and cheaper to build, while creating new ways to improve products and serve customers. We look for businesses with a strong position today and a clear opportunity to use AI to make that position even stronger.
The framework
Eight AI moats that shape our underwriting.
Each moat is a specific reason a general-purpose model cannot disintermediate what the customer is paying for. We score every business against all eight on the evidence, not the pitch.
| Moat | What it is | Why AI cannot shortcut it |
|---|---|---|
|
01Proprietary data
|
Years of domain-specific records that accumulate with use and cannot be bought or scraped. Compliance histories, clinical workflows, customer records. | A model cannot train on data it does not have. We also test the right to use it separately from the asset. |
|
02Embedded workflows
|
Software woven into how the customer operates every day, with switching costs to match. | AI enhances an entrenched process. It does not remove the cost of ripping one out. |
|
03Regulatory lock-in
|
Validated systems, certifications and compliance mandates that took years to earn and would take years to re-earn. | There is no shortcut through a regulator. A new entrant starts the clock from zero. |
|
04Distribution channels
|
A captive customer base reached through channels a new entrant cannot easily replicate or route around. | A better product still has to find the buyer. The channel is the hard part. |
|
05Ecosystem dependencies
|
Integrations, plugins and APIs that make the product a hub other systems are built on. | Every connection is a re-implementation cost that a rebuilt front end does not remove. |
|
06Network effects
|
Multi-sided platforms where value compounds with each additional participant, in a niche that tends toward a single winner. | Liquidity cannot be generated; it has to be earned. Being second is being last. |
|
07Physical infrastructure
|
Software bound to physical assets, hardware or on-premise infrastructure. | A digital-only competitor cannot replicate the layer that touches atoms. |
|
08Scale advantage
|
Dominant share of a niche, with unit economics a smaller entrant cannot match. | Volume sets the cost floor. A new entrant competes uphill on price from day one. |
AI durability
How durable is the revenue?
Recurring revenue is only valuable if customers continue to need the underlying product. We look at how much of a company’s revenue is tied to work that AI could increasingly perform itself – from generating reports and configuring templates to producing standardised outputs or delivering routine services.
We then ask a simple question: how much of that revenue is likely to remain durable as AI gets better?
We assess this for every company we consider. Exposure to AI is not necessarily a reason to walk away. What matters is whether the underlying customer relationship, workflow and product become more valuable as the technology evolves – and whether the business has a credible path to capture that value.
Think we could be a good fit?
We look for profitable B2B software businesses with strong customer relationships, important workflows and room to keep building. If that sounds like your business, we’d like to hear from you. You don’t need to be ready to sell – we’re happy to start a conversation whenever the time is right.