Venture Capital Intelligence Report
December 30, 2025 • Synthesizing insights from top-tier VCs
VCs see tech fundamentals as strong but are selective on valuations. Post-ZIRP reality has settled in with focus shifting to sustainable unit economics and clear paths to profitability.
Series A+ rounds require stronger metrics. Seed still active for exceptional AI/vertical SaaS teams. Bridge rounds common as companies extend runway.
Down 30-40% from 2021 peaks but stabilizing. AI infrastructure commands premiums, everything else normalized to 2019 levels.
The picks and shovels play for the AI gold rush. Every company needs AI infrastructure to compete.
AI agents that can actually complete complex workflows in specific domains will capture massive value.
IRA funding creating massive tailwinds. Focus on enabling infrastructure rather than point solutions.
Geopolitical tensions driving military modernization. Software eating defense spending.
B2B payments and financial infrastructure still fragmented. AI enabling new products.
Horizontal AI tools will be commoditized by Big Tech - the value is in vertical integration
Developer ecosystem lock-in will determine AI platform winners, not model quality alone
The next wave of software companies will need different business models as barriers to entry lower
Climate solutions are becoming economically superior, not just morally necessary
Enterprise apps built from the ground up with AI as the core interface, not a feature add-on
Foundation models finally good enough to replace traditional UIs for complex workflows
$500B+ market opportunity across all enterprise software categories
Early signals from: Greylock, Index Ventures, Accel
Companies to watch: Glean, Harvey, Hebbia
Apps that bridge physical and digital worlds using AR/VR and computer vision
Apple Vision Pro creating developer ecosystem, manufacturing costs declining
$200B market as spatial interfaces replace mobile for work use cases
Early signals from: General Catalyst, Bessemer, Lux Capital
Companies to watch: Magic Leap, Varjo, Spatial
AI systems that can run entire business functions end-to-end without human intervention
Multi-modal AI can now handle complex, multi-step business processes
$1T+ as AI replaces entire job categories, not just tasks
Early signals from: Lightspeed, Greylock, Founders Fund
Companies to watch: Adept, Imbue, Multi-On
Previous: Red hot 2020-2022 → Now: Significantly cooled
User acquisition costs skyrocketed, iOS privacy changes, market saturation
What Changed: Shift from growth-at-all-costs to sustainable unit economics
VCs Cautious: Benchmark, General Catalyst, Lightspeed
Previous: Extremely hot 2021-2022 → Now: Selective interest only
Crypto winter, regulatory uncertainty, utility questions
What Changed: Focus moved from speculation to real-world applications
VCs Cautious: Union Square Ventures, Paradigm, Coinbase Ventures
Previous: Hot 2018-2021 → Now: Very selective
iOS changes killed performance marketing, category saturation
What Changed: Customer acquisition economics fundamentally broken
VCs Cautious: Forerunner, Glossier Ventures, Unilever Ventures
Focus on workflow completion, not chat interfaces - users want outcomes, not conversations
💡 Map the full user workflow, identify where AI can eliminate steps entirely rather than just assist
— Sequoia Capital
Show profitability path by Series A, not just growth metrics
💡 Build financial model showing unit economics improvement over time, not just top-line growth
— Benchmark
Product-led growth works best when the product creates immediate, measurable value
💡 Design onboarding to show ROI within first session, make value quantifiable for buyers
— Bessemer Venture Partners
AI engineers are the new full-stack developers - hire for adaptability over specialized knowledge
💡 Look for engineers who can work across the AI stack rather than narrow specialists
— Greylock Partners
Data network effects are the only sustainable moat in AI - everything else gets commoditized
💡 Design your product so that more usage creates better AI models that attract more users
— a16z
Mega-rounds concentrated in AI infrastructure and defense tech. Traditional SaaS seeing smaller rounds with higher bars for metrics.
Series F • Lead: a16z • Others: Tiger Global, Sequoia
Validates data labeling/AI training infrastructure as massive category
AI InfrastructureSeries C • Lead: Google • Others: Spark Capital, General Catalyst
Big Tech consolidating foundation model ecosystem through strategic investments
Foundation ModelsSecondary offering • Key investors: Sequoia, Redpoint, Sutter Hill
Data infrastructure companies can achieve massive scale with strong unit economics
Take-private deal • Key investors: Accel, CapitalG, Sequoia
RPA category matured faster than expected, getting consolidated
AI will create more jobs than it destroys in the next decade
Most VCs believe AI will cause widespread job displacement
Reasoning: Historical precedent shows technology creates new job categories faster than it eliminates old ones
Their Bet: Investing in AI-powered upskilling platforms and human-AI collaboration tools
Remote work tools have peaked - return to office will drive new software categories
Remote work is permanent, keep investing in distributed collaboration tools
Reasoning: Hybrid work creates new problems that pure remote tools don't solve
Their Bet: Funding office management software and hybrid collaboration platforms
Crypto's killer app will be identity, not payments or DeFi
Crypto adoption will come through financial applications
Reasoning: Digital identity is the fundamental infrastructure layer missing from the internet
Their Bet: Portfolio companies building decentralized identity and reputation systems
One of the big AI labs will be acquired by Big Tech for $100B+ in 2025
MEDIUMSequoia Capital • Timeframe: Within 18 months
Implications: Would accelerate AI consolidation and limit independent innovation paths
First $1B ARR AI-native software company will emerge by end of 2025
HIGHa16z • Timeframe: 12-24 months
Implications: Validates AI software can achieve traditional SaaS scale and margins
Climate tech will see its first $50B market cap company in the next 3 years
MEDIUMKleiner Perkins • Timeframe: 2025-2027
Implications: Climate tech achieves true venture scale outcomes, not just impact investing
Apple will acquire a major AI company to catch up in the platform wars
SPECULATIVEGeneral Catalyst • Timeframe: Next 12 months
Implications: Would signal Apple's acknowledgment they're behind in AI infrastructure