Is SaaS Dead?

“Software is dead (long live the AI agent)” — Satya Nadella (Microsoft CEO)

There is a growing consensus that the software future is no longer in rigid, interface-bound applications but in intelligent agents — emerging as the new layer orchestrating data and workflows.

And if this vision is becoming true, the natural initial question is how today’s SaaS incumbents are faring. So let’s look at how listed SaaS companies are actually performing:

* Figma went public on July 31 and, and as of August 22, trades at 37.7x revenue, with 46.1% yoy quarterly growth

* Altimeter’s basket of 77 SaaS companies in the last quarter reported: Median LTM growth 14%, Gross Margin 76%, FCF Margin 18%, Net Retention 108%, and CAC Payback 40 months

Not bad at all.

Fabrica Ventures’ view is cautious: Software isn’t dead; it’s evolving (as always). Business models will shift with AI, yet the fundamental software premise — build a product, ship it broadly, refine it, and capture value through usage — remains intact.

Today’s moat isn’t just the “system of record;” it’s the workflows — sales, finance, billing, compliance — that wrap around it. Break those connections and you risk breaking the business. Even if AI makes it easy to “vibe code” a replacement, maintaining security, uptime, and edge cases is a burden most companies won’t take on.

That said, not every software startup is safe. A long tail of narrow, point solutions will be replaced by AI-driven tools — especially those that never held a defensible long-term position. By contrast, products that own core workflows and deep integrations should endure, provided they adopt AI themselves.

The real danger is that software’s long half-life can mask decline. Products may look stable while quietly losing relevance, with the impact surfacing only years later (we are still in the early innings of AI!). The only true defense is to integrate AI directly into the product — to enhance workflows, shorten time-to-value, and make those tentacles even stickier.

Conclusion

As seen in Fabrica’s portfolio — Intercom, Workato, Checkr, Addepar, and others— the software that adapts to AI will continue to compound in value.