Horizontal Markets: How Broad Appeal Drives Business Growth in Australia

When it comes to scaling a business in Australia, few strategies are as powerful — or as misunderstood — as tapping into a horizontal market. While vertical markets target niche audiences, horizontal markets spread their wings across multiple industries, offering products or services with broad appeal. In 2025, as competition intensifies and economic conditions shift, understanding the horizontal market is more crucial than ever for Aussie entrepreneurs and investors.

What Is a Horizontal Market?

A horizontal market refers to goods or services that meet a common need across a wide range of industries. Instead of focusing on a specific sector (like mining or aged care), a horizontal market player sells solutions that nearly any business might use — think accounting software, office supplies, or cloud storage platforms.

Key characteristics of horizontal markets include:

• Broad customer base: Products or services appeal to many industries.

• Scalability: The potential for rapid growth as adoption can spread across sectors.

• Competition: Often, these markets attract multiple providers vying for market share.

Classic examples in Australia include MYOB and Xero (accounting software), Atlassian (collaboration tools), and Canva (design software). Their products aren’t limited to one type of customer — they’re used by tradies, retailers, government agencies, and startups alike.

Why Horizontal Markets Matter in 2025

The 2025 business landscape in Australia is shaped by ongoing digital transformation, a tight labour market, and shifting consumer expectations. Horizontal market strategies offer several unique advantages:

• Resilience: Serving diverse sectors can cushion against industry-specific downturns. For instance, when retail spending dipped in early 2025, software providers like Xero maintained steady growth by serving professional services and healthcare clients.

• Innovation: Exposure to varied industries sparks product innovation. Atlassian’s tools, for example, evolved to meet the needs of both tech startups and government agencies, driving feature development and adaptability.

• Network effects: The more industries that adopt a product, the more valuable it becomes — both for users (through integrations and standards) and for the provider (through data and feedback loops).

Policy shifts are also fuelling horizontal market growth. The Federal Government’s 2025 Digital Capability Grants, for example, incentivise businesses across all sectors to invest in digital infrastructure — expanding opportunities for SaaS and IT firms operating horizontally. Meanwhile, changes to procurement rules allow greater access for Australian SMEs, levelling the playing field for homegrown horizontal market players.

Challenges and Strategies for Success

While the opportunity is vast, horizontal markets come with their own hurdles:

• Cutthroat competition: With more players in the game, standing out is tough. Differentiation through user experience, integrations, and customer support is vital.

• Complex sales cycles: Selling to many industries means more diverse use cases, requiring flexible onboarding and robust documentation.

• Regulatory complexity: Compliance can be tricky when serving sectors with different rules — such as healthcare privacy or financial data standards.

Practical strategies for Aussie businesses eyeing horizontal growth in 2025 include:

• Modular product design: Building platforms with configurable features allows easy customisation for different clients without fragmenting the codebase.

• Partner ecosystems: Collaborate with industry-specific experts to deliver tailored solutions and tap into existing client networks.

• Continuous feedback loops: Invest in customer success teams and analytics to understand how different industries use your product — and iterate fast.

Take the example of Canva, which in 2025 rolled out sector-specific templates and AI-powered design suggestions, making its horizontal platform even more appealing to education, hospitality, and small business clients.

Real-World Example: Horizontal Market Success in Australia

Case Study: Employment Hero

Employment Hero began as a HR platform for small businesses but quickly scaled by targeting a horizontal market. Today, it offers payroll, compliance, and employee engagement tools for businesses of every size and industry across Australia. By focusing on universal workplace needs and leveraging integrations with accounting and rostering platforms, Employment Hero captured a wide swath of the market, securing further growth and funding rounds in 2025.

The Bottom Line

Horizontal markets are driving some of the most dynamic growth stories in Australia’s business landscape. For founders, investors, and professionals, understanding how to build and scale for a broad audience is now a critical advantage — especially as digital adoption accelerates across every sector. In 2025, businesses that master the art of horizontal expansion are set to define the next chapter of Aussie innovation.