Venture Capital Intelligence Report
February 26, 2026 • Synthesizing insights from top-tier VCs
VCs see a maturing AI market with clearer winners emerging, but remain cautious about valuations in late-stage rounds. Strong public market performance in tech (NASDAQ +1.26%) is creating exit opportunities but also raising bar for growth metrics.
Bifurcated market: abundant capital for proven AI/infrastructure plays, stringent requirements for everything else. Seed rounds remain active, Series B+ much more selective.
Down rounds increasing in growth stage, seed/Series A valuations stabilizing. Revenue multiples compressing except for AI leaders with clear moats.
Massive demand for specialized compute, inference optimization, and model serving infrastructure as AI goes production
Move from chatbots to actual workflow automation agents that can take actions across enterprise systems
Traditional vertical SaaS players adding AI capabilities creating step-function value improvements
Physical infrastructure plays for energy transition gaining momentum with supportive policy environment
Next-gen financial infrastructure enabling embedded finance and AI-powered financial services
Next decade will see shift from humans adapting to software to software adapting to humans via natural language
Horizontal AI tools will commoditize, but vertical AI applications with domain expertise will build lasting moats
Moving from R&D to deployment phase with proven technologies ready for scale
AI systems that combine multiple models, tools, and reasoning approaches rather than relying on single large models
Cost and latency concerns with monolithic models driving modular approaches
$50B+ market as enterprises need specialized AI workflows
Early signals from: Greylock, Index Ventures
Companies to watch: LangChain, Dust, Fixie
Tools and platforms helping companies comply with emerging AI regulations (EU AI Act, etc.)
EU AI Act enforcement beginning, US federal regulations likely
$10B+ market as all AI deployments need compliance
Early signals from: Accel, General Catalyst
Companies to watch: Robust Intelligence, Arthur AI, Fiddler
AR/VR applications for industrial training, remote assistance, and design collaboration
Apple Vision Pro creating enterprise interest, remote work permanence
$25B+ market in industrial and enterprise segments
Early signals from: Bessemer, Lightspeed
Companies to watch: Magic Leap, Varjo, Immersed
Previous: Red hot during pandemic → Now: Ice cold
User acquisition costs skyrocketing, privacy changes, market saturation, TikTok dominance
What Changed: iOS 14.5 privacy updates + rising CACs made unit economics challenging
VCs Cautious: Benchmark, Greylock, General Catalyst
Previous: Pandemic darling → Now: Significantly cooled
Return to in-store shopping, customer acquisition cost explosion, supply chain normalization
What Changed: Post-pandemic behavioral reversion + Facebook/Google ad cost inflation
VCs Cautious: Forerunner, Accel, Lightspeed
Previous: ChatGPT hype cycle peak → Now: Cooling rapidly
OpenAI/Anthropic feature releases making many startups obsolete, lack of defensibility
What Changed: Realized most AI wrappers have no moats against foundation model providers
VCs Cautious: Most tier-1 VCs
Focus on proprietary data flywheels and workflow integration rather than model performance alone
💡 Build systems that get better with customer usage and create switching costs through workflow integration
— Sequoia Capital
Demonstrate capital efficiency improvements with each round, not just growth
💡 Show improving unit economics and path to profitability, especially for Series B+
— Benchmark Capital
IT buyers now expect AI features as table stakes, not premium add-ons
💡 Build AI capabilities into core product rather than separate AI modules
— Bessemer Venture Partners
Hybrid teams of AI researchers and domain experts outperform pure AI teams
💡 Hire domain experts early to guide AI development toward real customer problems
— Greylock Partners
Deal volume down 25% YoY but average check sizes up 40%, indicating flight to quality. Seed market remains healthy with 1000+ deals per quarter.
Series C • Lead: Google • Others: Spark Capital, Amazon
Validates enterprise focus over consumer AI applications
Foundation ModelsSeries F • Lead: Accel • Others: a16z, Index Ventures
Shows continued demand for high-quality training data services
AI InfrastructureIPO • Key investors: Greylock, a16z, Kleiner Perkins
Design tools with network effects can achieve massive scale even in niche markets
Most AI startups are solving non-problems with expensive technology
AI will transform every industry and workflow
Reasoning: Many AI applications add complexity without meaningful productivity gains
Their Bet: Focusing on traditional software companies adding thoughtful AI features
European AI startups will outcompete US counterparts in enterprise
US maintains AI leadership across all segments
Reasoning: Europeans better at understanding enterprise workflows and privacy requirements
Their Bet: Leading rounds in European AI infrastructure and vertical SaaS companies
At least 3 major software companies will be acquired primarily for their proprietary training data
HIGHGeneral Catalyst • Timeframe: Next 18 months
Implications: Data becomes more valuable than software functionality in AI-driven M&A
First $100B+ AI infrastructure IPO will happen
MEDIUMa16z • Timeframe: 2027
Implications: Validates AI infrastructure as largest value capture layer
Climate tech will see first $10B+ IPO
MEDIUMKleiner Perkins • Timeframe: 2026-2027
Implications: Climate tech reaches true industrial scale and investor acceptance
Will validate whether AI features drive real value or just hype
Customer retention and expansion improve with AI features
AI features fail to move core business metrics
Will determine if current valuations are sustainable
Anthropic/OpenAI show clear route to positive unit economics
Compute costs remain prohibitive for sustainable business models
Will prove whether technology can scale beyond pilots
Multiple GW-scale deployments of storage/renewable tech
Projects remain small-scale despite funding increases