It seems to me that there are always spaces in a market for companies that aren't necessarily looking for world domination in a segment, but just want a sustainable business which does their thing pretty well. ie - Kagi doesn't have to be The Google Killer, it just has to work well enough that people like me give them money and like what they get in return.
Kagi became profitable in 2024 after 2 years of business, and that's even with the (probably considerable?) (current) costs of using Google's index. If they carry on being a niche business, but one that continues to grow (currently 41k members [0]) then that works nicely for me, and presumably lots of other people like me. They don't have to be "general search", they just have to be good enough that people pay for it.