Last week’s Annual Meeting in Menlo Park brought our investors, Tech Partners and entrepreneurs together for two days of great conversation. The meeting covered a range of updates, including fund performance, key market trends and the investment themes that have set Rally apart for more than a decade.
A central theme this year was the way the software market is splitting in two. Horizontal SaaS, the general-purpose tools businesses use for things like email, reporting and marketing, is under real pressure as AI takes on more of the work that used to fill those seats. Vertical software embedded in regulated industries, often combined with embedded finance, is moving in the opposite direction. Companies like Vertical Insure and JustiFi are leaders in their categories precisely because they build software deeply integrated into industries where licenses, regulations and proprietary data create the kind of moats AI can’t easily replicate. This is exactly where Rally has been concentrated for years, and we’re leaning further in.
Another theme that came up throughout the meeting: building an AI-native company in 2026 feels a lot like building an internet-native company did fifteen years ago. The founders designed around AI from the start are pulling ahead, and the gap is widening fast. The strongest AI-native founders we back have spent years inside a specific business problem, and they’re using AI to do something that wasn’t possible before.
Cybersecurity also came up often. AI is reshaping both sides of the equation, and two of our portfolio companies are leading the response. Bugcrowd has built a community of more than 1 million vetted security researchers across 100+ countries and is now applying AI to that work for frontier AI labs. Appdome protects more than 3.6 billion mobile apps and processes more than 1.3 trillion threat events every month, using that data to train AI that adapts to new attacks in real time. The pattern we keep seeing: the winners will be the ones who combine AI with deep human expertise and proprietary data.
Vertical Insure, Lucem Health and Blank Metal joined us in fireside chats to share a closer look at the work happening across the Rally portfolio. And, we’ve continued to strengthen our team. Earlier this spring, we welcomed Liz Benz as Operating Partner, bringing two decades of GTM experience to the partnership. She joins Luke Zaientz, who came on as Operating Partner last year, deepening the bench of operators working directly alongside our founders.
The conversations and the connections in the room are a real reminder of how lucky we are to have this group in our corner, and we’re already looking forward to next year!
