For the last several years, we have written about the SaaS+ category. Today we are updating the name to AI+. This is a naming change, not a thesis change. The companies we are investing in look largely the same as they did a year ago. What has changed is the entry point.
When we wrote about SaaS+, we were really describing a single model: software paired with regulated financial products like payments, lending, insurance and background screening. The SaaS prefix described how customers entered the category. They were buying software to solve a business problem. The “+” was the embedded financial products, which is where the economic returns actually came from.
The “+” has not changed. Embedded fintech and adjacent regulated products still drive the majority of revenue and the vast majority of defensibility in these businesses. Roughly 90% of our portfolio sits in companies built on this model, and we expect that to hold.
What has changed is the front door. A year ago, customers were buying software with embedded fintech inside it. Today, increasingly, they are buying AI capability with embedded fintech inside it. The buying conversation now starts with an AI-native workflow, an intelligent assistant or automation built around industry-specific context. But once customers are on the platform, the revenue still comes from embedded payments, lending and insurance products.
We explored why AI can be defensible—and why our portfolio has an unusual advantage—in The Context Moat. The short version is that AI alone rarely creates a lasting advantage. Durable businesses are built on proprietary workflows, trusted customer relationships and regulated infrastructure that AI makes more valuable.
What AI+ looks like in practice
These three companies are only a sample. About 90% of Rally’s portfolio is built on this same mix of AI and embedded fintech.
Otto Sport AI helps youth sports clubs and leagues run their operations, taking the administrative load off directors and coaches so they can focus on the kids and sports. Its AI assistant, OTTO PILOT, handles the constant stream of parent questions and other routine administrative work. And, the platform processes registration payments, event ticketing and insurance, which generate the majority of the company’s revenue.
Order.co helps finance teams buy the things their company needs, using AI to find suppliers, get purchases approved and place orders. However, the real business is in the payments. Order.co issues its own virtual cards, hundreds of thousands of them a year, and the company’s economics run on the spend that flows across them.
GigSafe helps delivery and logistics companies manage their 1099 drivers, using AI to handle onboarding, background checks and the compliance paperwork these regulated industries require. It makes its money on two things it sells alongside that software: insurance for the drivers, and the payments that get them paid. Because GigSafe already tracks whether every driver is compliant, it can offer cheaper insurance than a normal broker, since it knows exactly how much risk it is taking on.
