What Census Data Tells Us About Growth, Fragmentation, and the Next Great SaaS Markets (Maybe)

In a recent article, “Where Are The Opportunities in Vertical SaaS? Picking Your Market in 2025”, we updated data from the 2017 Economic Census with 2022 Census data to show relative sizes and industry fragmentation across industries as defined by six-digit NAICS codes. The theory: larger, more fragmented sectors are attractive for Vertical SaaS providers.

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In response, Sam Gerstenzang, co-founder of two tech-enabled vertical companies, Moxie and Meadow Memorials, asked if we would compare the 2017 and 2022 datasets to examine which industries had grown the most and which had become more or less concentrated. Sam’s wish is our command. Thanks to my trusty sidekick, Matthew Solomon, who has the necessary data wrangling skills.

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The chart below plots the compound annual growth rate of revenue between the 2017 and 2022 censuses for the 820 six-digit NAICS industries on the X-axis.  The Y-axis shows the change in industry fragmentation during the same period. Fragmentation is measured by the percentage of an industry’s revenue that is outside the top 50 firms, consistent with our prior post. Each circle's size indicates the relative size of the industry’s total 2022 revenue. The dotted lines represent the median change in concentration (near 0%) and the median growth in sales of 5.19%.

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