Mid-Cap SaaS Repricing Bet
Greg@gregthegreek
+4.2%
since Oct 1
The idea
I think the market got too pessimistic that AI will gut mid-cap SaaS seats and revenue, when enterprises are actually still leaning into these products. This basket spreads across customer/GTM, dev infrastructure, workflow, security, and finance ops software that sold off in that panic, so no single sub-theme can sink it. I'm holding some cash to add on weakness and giving it one to two years for steady retention and renewals to force multiples back up. If usage or retention actually breaks down instead of holding steady, that would change my mind.
What it owns
- Marketing, sales and messaging platforms embedded in daily revenue operations are priced as if AI will replace them tomorrow, but switching costs and revenue automation make them sticky. · HubSpotRuns the sales and marketing engine for thousands of mid-size businesses as sticky, mission-embedded software that handles daily revenue operations., TwilioServes as the plumbing infrastructure behind customer messaging, and plumbing does not get replaced when new technology arrives, it gets more traffic., BrazeBecomes deeply wired into how brands conduct customer communications, creating the kind of product stickiness that drives routine renewal patterns., KlaviyoOwns customer data and email automation flows for e-commerce brands, making switching costly and renewals routine operational expenses., Five9Provides contact center software hit hardest by AI-agent replacement narratives, making seat revenue resilience the key proof point for this position.26%
- Tools developers and data teams run production systems on are the hardest software to rip out, yet they sold off alongside everything else during the recent market repricing. · DatadogProvides the monitoring layer enterprises wire into production systems, making it difficult to remove as software workloads and AI increase., MongoDBHolds the actual data enterprises run production systems on, which is the last software any company removes to save money., GitLabPowers the complete DevOps platform that enterprises keep paying for, regardless of speculation that AI coding tools reduce developer seat counts., ElasticPowers search functionality inside enterprise applications, and search arguably becomes more necessary rather than less as AI workloads expand.23%
- Collaboration and agreement software where whole teams live daily have held customer counts better than stock prices suggest, indicating mispricing relative to underlying stickiness. · monday.comIt lands bigger enterprise accounts and expands inside them, with customer growth and retention driving multiple expansion., AtlassianJira and Confluence are where enterprise dev teams live daily, and migration away from them is a project few organizations volunteer to undertake., DocuSignEmbeds into how companies sign and manage contracts, creating boring mission-critical software that renews on autopilot with minimal switching risk.18%
- Security spending is the last budget enterprises cut and only grows as more systems and agents come online, yet these mid-caps traded with discretionary software discounts. · OktaSits at the authentication layer in front of every enterprise application, and identity access only becomes more critical as AI agents and software proliferate., SentinelOneProvides one of the most cost-efficient ways to own the fact that enterprises expand security spending rather than cutting it., TenableScans for vulnerabilities as compliance-driven software that renews almost by default, embodying the sticky spend the take says the market mispriced.14%
- Payments, billing and payroll software renews on autopilot once embedded in finance operations, providing steady quarterly renewal evidence that contradicts decline narratives. · BILL HoldingsProcesses bills and payments for small and mid-size businesses as workflow so embedded in finance operations that leaving creates operational friction., PaycomRuns payroll systems that nobody experiments with or replaces lightly because they touch the core function of paying employees.8%
- Cash10%