Actively Physical Build · Operate · Grow

Software & Platforms

Software and platforms have become core supply, since booking, membership, payment, and analytics systems now run the operational layer of nearly every active business. The model is recurring subscriptions, often combined with a take rate on payments, and once embedded these systems are sticky because switching disrupts bookings, billing, and member data at once. That stickiness underpins the segment's attractive economics.

Software & Platforms

The recurring model

Subscriptions and take rates

Platform businesses earn through recurring subscriptions and, increasingly, a take rate on the payments they process. The combination turns a software relationship into a transactional one, where revenue grows as an operator processes more bookings and payments. Low capital intensity and high gross margins make the model appealing, but acquiring and onboarding operators is the main cost and the main constraint on growth.

Stickiness and switching cost

The system of record

Once a platform runs an operator's scheduling, billing, and member data, switching becomes painful, which makes these systems durable and defensible. The platform becomes the system of record, shaping how the operator understands its own customers and capacity. That position is the source of both retention and pricing power, but it also raises the stakes on reliability, since downtime hits the operator's revenue directly.

Data and expansion

Growing within the account

The most valuable platforms expand within existing accounts as operators add modules, process more payments, and rely on more of the system. First-party transaction and member data underpin analytics, marketing, and retention features that deepen the relationship. Net revenue retention, the growth of revenue from existing customers, often matters more than new-logo acquisition, since expansion compounds while acquisition merely adds.

Related sectors