Investors foresee the emergence of a new paradigm in 2025-2026 that will set the rules for the next decade. While previous years were characterised by rapid investment in high-profile ideas, this is now only true for AI. Read our article to find out what has changed.
What is happening in the venture market today?
Transaction dynamics and investment volume
Global funding reached $205 billion in the first half of 2025, the highest figure since 2022. However, a striking paradox today is the discrepancy between the volume of investment and the number of deals. Although dollar funding figures have grown, the number of deals has fallen sharply.
This discrepancy clearly indicates a preference for quality over quantity. Investors are allocating large sums to fewer companies that are perceived as less risky, primarily those in later development stages. This creates the illusion of a healthy market.
This state of affairs masks the growing difficulties faced by most startups seeking capital. The market is becoming increasingly polarised, with a few companies receiving the majority of funding while others struggle for the remaining resources.
Market dynamics are now creating a new equilibrium, with funds shifting their focus to established businesses. For investors, this means lower risk but also lower supply. For entrepreneurs, it means higher transparency requirements and the need to be willing to work with large amounts of capital.
Where is the capital going? Regions and niches
In 2025, the United States strengthened its dominant position in the global venture capital arena. In the second quarter alone, American companies attracted two-thirds of the global total. This dominance is almost entirely due to the powerful AI ecosystem.
In the first half of the year, the US accounted for 83% of the total value of transactions in the AI sector. Silicon Valley remains the epicentre, attracting almost 70% of all US venture capital investment in the first quarter, largely thanks to OpenAI.
In Europe, activity is concentrated in climate technology and biotechnology. Startups working on renewable energy, waste recycling or green logistics are attracting the attention of venture capital funds and government support programmes alike. Despite its complex geopolitical context, Eastern Europe continues to impress with its expertise in deep tech and cybersecurity.
In terms of niches, the largest amount of capital continues to be directed towards artificial intelligence, particularly applied solutions: AI in medicine, finance, and industry, for example. The second hot topic is biotech, ranging from personalised medicine to genetic innovations.
Key trends in venture capital investment for 2025–26
Focus on AI, deep tech and biotech
These three areas are the foundation of the new wave of venture capital investment. These fields combine enormous innovative potential with the ability to create new markets.
AI has become a key area thanks to its proven practical value. From production automation to personalised medicine, AI is already transforming the economy. Investors are paying close attention, but not everyone receives funding — only those who can demonstrate scalable, applied solutions.
Deep tech encompasses more complex technologies at the intersection of science and business, such as quantum computing, new materials and robotics. These technologies have a longer development cycle, but they create unique competitive advantages. Venture capital funds are willing to wait longer here because the potential rewards can be enormous.
Biotechnology is another area of interest. Personalised treatment, genetic research and synthetic biology are making possibilities that seemed like science fiction just ten years ago a reality. The demand for investment in biotechnology is driven by global challenges such as an ageing population and the need for new treatments, as well as the experience of the pandemic.
Together, these three areas define the venture market. Investors recognise that this is where the leaders of the future will emerge.
Are ESG and social projects a trend or a new standard?
Just a few years ago, the ESG approach (environmental, social and corporate governance) was seen as a bonus or a mere formality. Now, however, it has become a standard that investors consider almost automatically.
The reason is simple: long-term company value is impossible without a sense of responsibility towards society and the environment. Investors see risks in businesses that ignore these aspects, as they may face regulatory restrictions, scandals, or consumer boycotts. Conversely, startups that integrate sustainable development into their business model gain a competitive advantage.
Investments in green technology are growing particularly rapidly, including renewable energy, the circular economy and technologies for reducing emissions. Social projects focused on improving access to education, healthcare, or financial services in developing countries are also gaining momentum.
ESG projects attract large institutional funds and banks, for whom compliance with standards is a prerequisite for accessing global markets. This means that, even if some entrepreneurs are sceptical, they are forced by reality to take these criteria into account.
ESG is evolving from a niche approach to becoming the new norm. This is a challenge for startups, which need to demonstrate financial efficiency as well as social and environmental impact. For investors, it is a way to reduce risk and boost confidence.
Technologies for healthcare and mental health
Venture capital investment in healthcare has always been a priority, but the focus will become even stronger in 2025-2026. The health tech sector encompasses a wide range of technologies, including telemedicine, wearable health monitoring devices and biotech breakthroughs in chronic disease treatment. The digital medicine segment is growing particularly rapidly as it offers accessibility, efficiency, and scalability.
Mental health is a separate area. For a long time, it remained in the shadows, but today it is becoming strategically important. Psychological support apps, online therapy and burnout prevention technologies are of interest to investors and employers alike. Demand is driven not only by social trends but also by economic considerations: the mental health of employees directly impacts company productivity.
For investors, healthcare and mental health represent a combination of social significance and high market potential. The logic is simple: startups that help people to live longer and better lives have a long-term competitive advantage.
Where should we look for the next unicorns?
Markets poised for take-off
The markets with the greatest potential in 2025–26 are those that combine three characteristics: rapid growth in demand, technological breakthroughs and support from the state or corporations.
The artificial intelligence market lies in applied industries. While a few years ago AI was associated with chatbots, the greatest growth is now expected in industrial automation, medicine, and finance. This is where the demand for scalable solutions that demonstrate immediate economic benefits is growing.
The next frontier of automation is AI that moves from language models to action models. These are so-called AI agents: autonomous systems that can understand goals, make decisions, and perform complex tasks. Leading venture capital funds regard them as a key investment area. In particular, a16z has identified agent AI as a core focus, believing it will transform the business process outsourcing (BPO) industry.
Another important area is biotechnology. Personalised medicine, gene therapy and synthetic biology are transforming the field of medicine. This includes the healthcare and life sciences sectors. The ageing population is accelerating the demand for these solutions even further. In Q1 2025, AI startups accounted for eight of the 11 mega rounds in digital healthcare.
And let's not forget about defence technologies. Venture capital investment in this sector has grown rapidly due to geopolitical instability, reaching more than $28.4 billion by August 2025.
Sectors underestimated by investors
Despite the activity of funds, many sectors remain underestimated. This is due to market inertia and excessive attention being given to high-profile industries.
One such sector is agritech. Although food security is a global challenge, agritech still receives less capital than AI, for example. However, innovations in vertical farming, biotech fertilisers, and water resource optimisation can be equally impactful.
Another example is cybersecurity. Although the cybersecurity market is growing, investors are not financing it as actively as fintech, for example. At the same time, the growth of digital threats makes these solutions essential.
There are also some more unusual options. For example, spatial computing and the corporate metaverse. Although the initial consumer hype has died down, spatial computing is gaining a firm foothold in the corporate sector. Real-time simulations, digital twins and immersive learning are transforming industries such as healthcare and entertainment. The range of AI applications is also expanding rapidly into climate and green technologies.
Where do the top dogs invest?
The actions of leading venture funds and accelerators set a benchmark for the market. Their investment strategies indicate where capital will move in the coming years.
The a16z strategy is built on several key pillars:
- AI across the entire stack. This includes active investment in infrastructure (e.g. GPU assemblies and OpenRouter), enterprise applications (e.g. native AI ERP systems and CRM disruption), and consumer AI.
- American dynamism. A specific thesis focused on companies that support national interests in sectors such as defence, aerospace, manufacturing, and energy.
- Bio plus Health. A specialised fund focusing on the convergence of AI, technology, and biology to establish companies that will transform disease diagnosis and treatment.
- Cryptocurrencies. Confidence in the future of Web3, with an emphasis on navigating the regulatory landscape and building the next generation of internet infrastructure.
Sequoia Capital, in turn, focuses on AI applications that are transforming key industries, such as retail and software development (Zed and Reflection AI), as well as supply chains (Magnetic).
As for Accel, its investments in native AI security (Prophet Security) and developer tools (Cursor) demonstrate a belief in the fundamental software layer necessary to support the AI ecosystem.
Here are a few trends from the YC accelerator:
- The agent economy. There have been numerous requests to create AI agents ('Vertical AI Agents', 'Personal AI Staff'), the tools to create them ('Development Tools for AI Agents'), and the new business models they will generate ('B2A: Software where agents are the customers').
- Next-generation infrastructure. YC is looking for start-ups to solve the AI era's fundamental bottlenecks, calling for the creation of new data centres optimised for hardware, code, and inference infrastructure.
- Native AI software. This involves rethinking established software categories with AI at their core. Examples include 'DocuSign 2.0' and the automation of 'Compliance and Audit'.
How will the strategy of venture capital funds change?
From scaling to sustainability
Just a few years ago, investors viewed a startup's ability to scale quickly as the main indicator of success: capturing as large a market share as possible and increasing the user base. However, by 2025–26, this approach will be less important. Instead, a new paradigm is emerging: a focus on sustainability.
This is a complex concept that encompasses financial discipline, adaptability to changes in the external environment, and striking a balance between growth and resources. The pandemic, energy crises, and geopolitical shifts have forced venture capital funds to reconsider their risk strategies. They are now more willing to invest in companies that build crisis resilience into their business models from the outset.
This requires new approaches to evaluating startups. While growth rates were previously significant, today the focus is on whether a company has the internal reserves to survive in difficult conditions. For example, can it reduce costs without compromising product quality? Is it able to quickly restructure its supply chain if one of its supplier countries exits the market? Does it have diversified sales channels?
The company's culture is becoming an important criterion. Investors are paying attention to how the team works, how it makes decisions, and how capable it is of self-organisation and rapid learning. After all, when faced with uncertainty, people become the key asset. If a startup has established a culture of trust, openness and accountability, this is a significant advantage in the eyes of investors.
This trend is also affecting the structure of deals. Rather than aggressive rounds with inflated valuations, deals involving phased financing are becoming more common: the fund allocates funds in instalments depending on the achievement of clearly defined targets. This reduces risk while motivating the startup to operate effectively.
Another aspect is the introduction of sustainability practices. Even if a startup is not inherently 'green', funds are asking: does it consider its environmental impact, how does it treat its staff, and what are its transparency policies? These elements are increasingly becoming part of due diligence.
More analytics, less emotion!
During the venture capital boom, which lasted until 2022, many deals were made based on trends, buzzwords and hasty evaluations. Investors often compete to be the first to invest in the next promising startup without taking the time to conduct a thorough review. However, this practice is now becoming increasingly irrelevant. Systemic analytics are coming to the fore.
Why is this happening? Firstly, competition among venture capital funds has increased. There are more investors and less capital, so every mistake is more costly. Secondly, blindly following the hype in a world of increased market volatility can lead to disastrous consequences, ranging from portfolio devaluation to loss of reputation.
Funds are now creating their own analytical departments or engaging external partners to conduct multi-level analysis of financial, product, market and technological factors. This involves conducting more in-depth research into unit economics, scenario modelling, assessing the competitive environment, and verifying the technical architecture of products.
Data-driven decision-making tools are also being used more and more. These include user behaviour analysis, LTV/CAC forecasting, supply chain resilience testing and hypothesis testing in pilot markets. This enables investors to gain insight not only from attractive presentations but also from concrete metrics that confirm the business's viability.
Another area is team assessment. After all, even the best idea will fail if it is not implemented properly. An increasing number of funds are using psychological tests, case interviews, and reference checks, not only from previous employers, but also from former partners and clients. These tools help to evaluate the founders' maturity, flexibility, and ethics.
This shift has another important advantage: it reduces the number of bubbles. Whereas previously, companies with a minimal product but a high-profile PR campaign could attract millions, they now face a more rational and sceptical view from investors. The market is being cleansed, and real innovations are receiving more attention.
Overall, it can be said that the venture capital industry is maturing. The more analysts involved in the decision-making process, the less room there is for emotional or impulsive deals. This benefits not only funds, but also startups, which receive more meaningful, long-term support.
Focus on profit and unit economics
One of the most striking trends in the venture capital world in 2025–26 is the resurgence of basic economic principles. Investors are once again prioritising profitability and high-quality unit economics. This may sound trite, but for a decade, it was often overlooked in the pursuit of growth at any cost.
So, what is unit economics? It is an analysis of how much a company earns (or loses) on each customer or transaction. In other words, does each unit of business generate additional value? If a company spends more on acquiring a customer than it receives from them over their lifetime as a customer, this is a warning sign. Funds are now looking very closely at these metrics.
There are several reasons for the return to a focus on profit. Firstly, the cost of capital has increased, meaning startups no longer have unlimited access to cheap funding. Secondly, limited partners (LPs) are demanding greater accountability and predictability from funds. Partners want to see portfolio growth and exits with a real multiplier. Thirdly, the success of companies in recent years that built a stable unit economy from the outset shows that they survived the turbulence and emerged stronger.
This is changing startup behaviour. Whereas founders previously prepared presentations on user growth charts, they now focus on detailed financial models. Key performance indicators such as CAC (customer acquisition cost), LTV (customer lifetime value), gross margin and payback period are becoming increasingly important. Investors want to see how these metrics change over time, how they respond to scaling up, and the development scenarios envisaged.
Interestingly, this trend does not signify a lack of ambition. In fact, funds are willing to invest in large markets and bold ideas, but only when there is clear financial logic behind them.
This approach also fosters healthy competition. Startups that cannot prove their economic viability simply do not receive funding. This cleans up the market, leaving more resources for those who are actually building a business, rather than just a presentation.
Therefore, focusing on profit and unit economics is not conservative, but a mature strategy. It is an attempt to combine innovation with financial responsibility. This combination has every chance of creating a new generation of companies that grow and bring stable returns to all their stakeholders.
The impact of macroeconomics and geopolitics on the venture capital market
How do investors view instability?
Instability in global markets is no longer an abstract concept. Investors no longer view it as mere fluctuations in stock indices; it directly affects the strategies of venture capital funds and the behaviour of startups. From 2025 to 2026, instability will be determined by three main factors: economic shocks, geopolitical changes and technological breakthroughs that can rapidly transform the market.
In times of instability, the first thing venture capital funds do is review their portfolio strategies. Previously, the priority was to capture the market at any cost, even if the company was not yet profitable. Nowadays, however, funds prefer business models with clear unit economics and a plan for unexpected crises. Capital is now allocated in stages depending on the achievement of key performance indicators.
Investors are increasingly focusing on market diversification in an attempt to minimise the risk posed by local crises. Funds are also actively using data-driven approaches to forecast startup development scenarios in changing conditions. This includes cash runway modelling, sensitivity analysis of key performance indicators and assessment of potential supply chain risks. Investors are looking for substantial opportunities as well as real mechanisms to protect their portfolios from market volatility.
An important psychological factor is that investors are learning to accept uncertainty as a permanent feature of the market. This means that decisions are now based on objective data and scenarios that allow for quick responses to changes, rather than on emotions. Startups that demonstrate adaptability and resilience are becoming more attractive to investors, even if growth rates slow down temporarily.
Rather than perceiving instability as a threat, it is viewed as an integral part of the business landscape that must be navigated. Investors who can balance the ambition of startups with the discipline of financial analysis gain a strategic advantage. This approach is shaping a new culture of venture investing that is more mature, thoughtful and prepared for unpredictable global changes.
Regulatory and national security risks
The modern venture market is increasingly dependent on the regulatory environment and national security issues. Investing in technology, particularly AI, cybersecurity, biotech and telecoms, cannot be considered without first assessing political and legal risks.
Each country has its own rules regarding data protection, technology export controls and foreign investment restrictions. For instance, artificial intelligence startups may encounter data localisation requirements or export licensing restrictions. Investors take these factors into account when making decisions, as violations of regulations can result in legal sanctions and loss of access to key markets.
Some technologies are considered critical to the state, and foreign investment in such projects is often restricted. This applies to cybersecurity, robotics, defence technologies and semiconductors. Venture capital funds investing in these sectors must consider political risks and comply with complex verification and sanctions procedures.
Funds are increasingly conducting in-depth compliance and due diligence checks on partners, founders, and suppliers. The key questions are whether the company complies with national security standards and whether its product will conflict with the laws of other countries. While this adds time and resource costs, it also reduces the risk of unforeseen problems.
New niches for venture capital are also being created by regulatory and national security risks. Startups offering solutions for cybersecurity, critical infrastructure management, or compliance with new standards are becoming particularly attractive to investors. Investors see these as offering high potential returns and low political risk, provided the technology complies with regulatory requirements.
Regulation and national security are now key elements of a venture fund's strategy, not secondary factors. The ability to correctly assess and integrate these risks into the investment process is critical to success in today's global market. Venture capital cannot exist in isolation from the legal, political and strategic realities of the world — it is inextricably linked to them.
