Venture Capital Intelligence Report
February 18, 2026 • Synthesizing insights from top-tier VCs
VCs are seeing a flight to quality as AI hype normalizes. Focus shifting from pure-play AI to AI-enabled business models with proven unit economics. Public market volatility creating opportunities for patient capital.
Series A+ rounds require stronger metrics. Seed still active for infrastructure plays. Bridge rounds common as companies stretch runway. International expansion deals heating up as US competition intensifies.
AI infrastructure valuations compressing 20-30% from 2025 peaks. Enterprise SaaS multiples stable at 8-12x ARR for top performers. Consumer/social apps seeing renewed interest at reasonable entry points.
The plumbing layer for autonomous AI agents is still being built. VCs betting on workflow orchestration, memory systems, and multi-modal reasoning platforms.
Financial institutions finally have budget and mandate to deploy AI. Compliance-first AI solutions seeing massive traction with traditional banks and insurance companies.
IRA funding + corporate net-zero commitments creating massive demand for climate infrastructure. Focus on proven technologies with clear paths to profitability.
Post-FTX institutional adoption accelerating. Focus on compliant infrastructure, stablecoins, and enterprise blockchain solutions rather than speculative tokens.
Traditional vertical SaaS companies adding AI features to defend moats and expand TAM. New entrants using AI-first approach to attack incumbents.
AI coding assistants creating new workflow patterns. Next wave focuses on deployment, monitoring, and collaboration tools for AI-augmented development teams.
Defense tech and AI infrastructure are converging. Companies building dual-use AI systems for both commercial and defense applications will dominate next decade.
Vertical software incumbents with AI integration will outperform horizontal AI platforms. Domain expertise + AI > Pure AI technology.
Corporate procurement of climate solutions accelerating faster than anticipated. B2B climate tech with proven ROI seeing massive demand.
Healthcare AI moving from pilot programs to production deployment. Regulatory clarity and reimbursement models creating massive opportunities.
Spatial computing infrastructure still nascent but enterprise adoption accelerating. Focus on picks-and-shovels plays rather than consumer experiences.
Automated systems for ensuring AI model compliance with evolving regulations across jurisdictions
EU AI Act implementation creating compliance requirements for AI systems globally
$50B+ market as all AI deployments require compliance infrastructure
Early signals from: Bessemer, Index, Accel
Companies to watch: Robust Intelligence, Arthur AI, TruEra
AI agents that can complete entire business processes end-to-end without human intervention
Multimodal AI models can now handle complex workflows involving multiple applications
$200B+ market replacing traditional RPA and workflow automation
Early signals from: Sequoia, Lightspeed, Greylock
Companies to watch: Adept, Hyperwrite, Zapier (AI evolution)
Energy-efficient AI computing and carbon-neutral model training platforms
AI energy consumption becoming corporate sustainability concern + regulatory pressure
$25B+ market as AI energy costs become significant line item
Early signals from: Kleiner, Breakthrough Energy, General Catalyst
Companies to watch: Cerebras, SambaNova, Graphcore
Post-quantum cryptographic solutions as quantum computing advances threaten current encryption
NIST post-quantum cryptography standards finalized, enterprise migration beginning
$15B+ market as all encrypted systems need upgrading
Early signals from: a16z, Intel Capital, In-Q-Tel
Companies to watch: PQShield, ISARA, Quantum Xchange
Previous: Red hot in 2024-2025 with ChatGPT wrapper apps → Now: Significantly cooled
High user acquisition costs, low retention, and platform risk from OpenAI/Google direct offerings
What Changed: Realization that most consumer AI apps lack defensible moats
VCs Cautious: Benchmark, Greylock, General Catalyst
Previous: Peak hype in 2021-2022 → Now: Minimal investor interest
Poor user experience, regulatory uncertainty, and shift to utility-focused blockchain applications
What Changed: Focus moved from speculation to real-world blockchain utility
VCs Cautious: Most traditional VCs except crypto specialists
Previous: Hot during pandemic e-commerce boom → Now: Very selective interest
iOS privacy changes killed performance marketing, customer acquisition costs unsustainable
What Changed: Return to unit economics scrutiny and brand differentiation requirements
VCs Cautious: Kleiner, Bessemer, Lightspeed
Don't build on single foundation model. Multi-model strategies with fallback options essential for production reliability.
💡 Implement model routing logic and vendor diversification from day one
— Sequoia (Pat Grady)
GovTech procurement cycles accelerating dramatically. Security clearances and compliance infrastructure now table stakes.
💡 Build FedRAMP compliance roadmap early if targeting enterprise customers
— a16z (Katherine Boyle)
Domain expertise and proprietary datasets create stronger moats than AI model performance alone.
💡 Focus on unique data acquisition strategies and vertical-specific workflow integration
— Bessemer (Byron Deeter)
US AI regulations creating opportunity gaps in international markets. Early international expansion advantageous.
💡 Consider international-first go-to-market for AI applications in regulated industries
— Index (Sarah Cannon)
Deal activity normalizing after 2024-2025 correction. Quality companies still attracting premium valuations, but flight to quality evident. International deals heating up as US competition intensifies.
Series C • Lead: Google Ventures • Others: Spark Capital, Salesforce Ventures
Validates continued mega-round appetite for foundation model companies with differentiated safety approach
Foundation ModelsSeries F • Lead: Accel • Others: Tiger Global, Dragoneer
Data labeling becoming mission-critical infrastructure as AI model quality depends on training data
AI InfrastructureSeries E • Lead: Sequoia • Others: a16z, Index
Design tools + AI creating new category of creative productivity software
Design/AI ToolsAcquisition • Key investors: Accel, CapitalG, Sequoia
Process automation incumbents valuable acquisition targets for big tech AI strategies
IPO • Key investors: Sequoia, a16z, Kleiner
Marketplace businesses with AI enhancement can achieve successful public exits