In Q1 2025, vertical software financing reached $10.4 billion across 552 deals in the US and Canada, with healthcare AI leading the sector in investment activity.

Target Information

The quarter ending Q1 2025 saw significant financing activity in the vertical software sector, with $10.4 billion raised across 552 deals in the United States and Canada. This amount represented 42% of the total capital raised in this space, reflecting strong investor interest, particularly in early-stage companies. The majority of capital was concentrated in the healthcare and AI sectors, with notable rounds around $250 million for Abridge and $30 million for Freed, exemplifying the substantial growth potential of these verticals.

One key player, Abridge, specializes in automating clinical documentation through AI, along with extensive partnership strategies with healthcare systems. With this new funding, Abridge aims to enhance its proprietary technology aimed at improving healthcare communication. Similarly, Freed’s rise in the market showcases the dual paths to success in healthcare AI, with their affordable offerings catering to thousands of clinicians.

Industry Overview

Throughout 2025, the vertical software industry, particularly in the US and Canada, has demonstrated resilience and adaptability amid evolving market conditions. The vertical AI segment is witnessing increased venture capital participation, with h