Shamillah Bankiya<\/a>, Partner, Dawn Capital <\/strong><\/p>\nFor founders selling to enterprises, I think the entire world has gotten smarter on the value that AI can deliver, and as such, proving \u2014 showing line of sight to ROI \u2014 will be more important than ever to investors. Founders who can prove that their products offer much higher value have the best shot at raising capital.<\/p>\n
What areas are you looking to invest in and why?\u00a0<\/p>\n
Norman<\/strong><\/p>\nAs a fund, we remain industry-agnostic generalists, but we are always sharpening our lens. Today we\u2019re looking for \u201chigh-context founders.\u201d In a world where AI has commoditized the ability to write code, the winning edge is now lived experience. We want to invest in the founder who has spent years in the trenches of a complex industry and possesses the bespoke expertise that can be 10x\u2019d by AI. For us, the ideal investment is a marriage of deep subject matter expertise and a \u201cday zero\u201d distribution advantage, meaning founders don\u2019t just know what to build but already know exactly who is going to buy it.<\/p>\n
Blumberg\u00a0<\/strong>\u00a0<\/p>\nWe are particularly interested in sleepy or legacy industries that sit outside core tech founder appetite, where AI can offer step-change ROI that drives adoption. These markets have lower competition and moats driven by complexity that often come with less obvious sectors. We also believe 2026 will be a great year for infrastructure supporting foundational model development, as well as frontier research categories like embodied AI and world models. Healthcare remains a major focus given clear signs of buyer demand; we focus on systems of record and platforms rather than point solutions.<\/p>\n
Taylor<\/strong>\u00a0<\/p>\nOutside the United States! The best risk-adjusted venture returns are not in Silicon Valley anymore. They are in markets like Poland, Turkey, and Greece.<\/p>\n
When you invest across 25 countries in a single year, you stop thinking of venture as something that happens in one place and then spreads outward. Twenty years ago, roughly 90% of venture dollars went to the United States. That flipped in 2018. Today, more than half of venture investment \u2014 and more than half of the world\u2019s unicorns \u2014 are outside the U.S.<\/p>\n
We see this every day. Founders in Latin America, Africa, the Middle East, and South Asia are building venture-scale companies \u2014 often serving massive markets from the start. In our pipeline, it\u2019s normal to see founders from Venezuela building in Iraq, or from Sudan building global businesses.<\/p>\n
Chang<\/strong><\/p>\nI\u2019m most interested in founders who are tackling massive problems and leveraging technology for forward progress. I\u2019m rather unmoved by the plethora of startups focused on agentically automating workflows for specific verticals. I\u2019m much more interested in the larger platform shifts that will define this era of technological and societal progress.<\/p>\n
Bankiya <\/strong><\/p>\nWe\u2019ve seen tremendous impact on software from AI. I think the next frontier is at the intersection of software and hardware. Most of the world\u2019s GDP is locked up in physical industries, and software-only solutions aren\u2019t enough to fully unlock the world\u2019s growth potential.<\/p>\n
Do you think the IPO market will thaw? Why or why not?\u00a0<\/p>\n
Norman<\/strong>\u00a0<\/p>\nYes, the IPO market is likely to thaw, not because conditions are suddenly ideal, but because the system is running out of viable alternatives. We\u2019re approaching a tipping point where the private market\u2019s ability to sustain multibillion-dollar valuations, often disconnected from profitability or liquidity, is wearing thin. Years of \u201cpaper markups\u201d have postponed reality, but they haven\u2019t eliminated it. Companies, boards, and late-stage investors increasingly need a mechanism to reset expectations, generate real liquidity, and re-establish price discovery.\u00a0<\/p>\n
Private credit has acted as a stopgap, extending runways without forcing valuation discipline. But that bridge is starting to look more like a pressure cooker. Debt can delay decisions, not solve structural capital needs, especially for companies built for equity-style growth. At some point, fresh capital becomes necessary, and public markets remain the only place capable of providing it at scale. Their growth narratives and strategic importance can provide the \u201cair cover\u201d needed to reopen the IPO window. Once investors re-engage around category-defining leaders, it creates permission for the broader high-growth software sector to follow.<\/p>\n
Blumberg<\/strong>\u00a0<\/p>\nI think we will see a reopening of the IPO markets driven by the backlog of companies planning to list. Many large tech IPOs are\u00a0anticipated,\u00a0including darlings like Anthropic and OpenAI, and I believe one of these mega IPOs will drive considerable momentum for others.\u00a0<\/p>\n
Taylor<\/strong>\u00a0<\/p>\nYes \u2014 2026 will be a big year for IPOs in New York as dozens of the top companies simply decide \u201cit\u2019s time.\u201d It will also be a banner year for tech IPOs in places folks are not used to seeing them \u2014 like the stock market in Saudi Arabia.\u00a0<\/p>\n
I think people\u00a0underestimate how global the thaw will be.\u00a0We\u2019ve\u00a0had\u00a0nearly four\u00a0years of muted IPO activity, which has created a backlog of high-quality companies that are ready to be public. When the window opens, it\u00a0won\u2019t\u00a0just be U.S. companies stepping through it.\u00a0There\u2019s\u00a0already a cohort of major U.S.-listed technology companies from Latin America, including\u00a0MercadoLibre\u00a0and\u00a0Nubank, and\u00a0there\u2019s\u00a0another wave right behind them that public-market investors\u00a0haven\u2019t\u00a0fully priced in yet.\u00a0I don\u2019t think all of those companies list in 2026, but several will.\u00a0<\/p>\n
What\u2019s\u00a0even more unexpected is what happens locally.\u00a0You\u2019re\u00a0going to see meaningful technology IPOs in places like Saudi Arabia, listed on the Saudi Stock Exchange (Tadawul). When companies like Tabby [a buy now, pay later outfit] go public locally, it will challenge assumptions about where global tech outcomes happen.\u00a0<\/p>\n
Chang <\/strong><\/p>\nWe\u2019re looking to make slightly fewer, more concentrated bets. There is a ton of startup activity, so when we meet founders who really stand out, we want to be able to back up our high conviction with a higher check size and higher ownership percentage.<\/p>\n
Bankyia<\/strong><\/p>\nI think a hard catalyst would be required to reset the IPO markets \u2014 something akin to mega AI players facing unprecedented cost increases or sharp revenue declines. Think, for example, of energy prices sharply rising, such that it\u2019s unaffordable to offer compute for AI training and inference.<\/p>\n
How are you looking at the venture market for next year as a fund\u00a0manager?\u00a0<\/p>\n
Norman\u00a0<\/strong>\u00a0<\/p>\nWe\u2019re entering what I\u2019d describe as a clearing event for the venture market, and next year will separate durable platforms from transient ones. The fallout will hit Fund I managers who haven\u2019t found their footing, and active Fund II managers struggling with a [distributions-paid-in-capital, or DPI] drought from 2021 vintages. Traditional institutional anchors, particularly university endowments, are effectively in repair mode. After being squeezed by the absence of liquidity in 2021 and 2022, many are leaning on secondaries, pacing adjustments, and portfolio-smoothing strategies just to maintain existing commitments.\u00a0<\/p>\n
That means fewer new relationships and far less tolerance for emerging or undifferentiated managers. Stepping into their place are family offices that have moved from passive LP roles to active market forces. They aren\u2019t just filling the \u201cLP oxygen\u201d left by retreating institutions; they are scoping direct mandates and using [registered investment advisors] to hunt for unique, high-conviction strategies.<\/p>\n
In 2026, there is no viable middle ground. You need to have a clinical, defensible track record and\/or truly unfair access to differentiated deal flow. Lightly grounded generalist positioning, soft networks, and \u201cgood enough\u201d performance won\u2019t survive this cycle.<\/p>\n
Blumberg\u00a0<\/strong>\u00a0<\/p>\nWe believe we are in the early innings of AI transformation, so we expect next year to be a strong vintage. Capital continues to concentrate in a select number of winners so we focus on being selective and operationally supporting our companies to earn our right to concentrate. We are advising our portfolio companies to strengthen their balance sheets in case of a downturn in 2026 while focusing on building for the long term rather than optimizing for fast funding.<\/p>\n
Taylor\u00a0<\/strong>\u00a0<\/p>\nAmazing time to back the boldest founders building for the next 10+ years! From a fund manager\u2019s perspective, 2026 looks strong on both deployment and liquidity. Last year we had 12 liquidity events \u2014 all through M&A and secondaries. That matters because venture has grown dramatically over the last two decades, while paths to liquidity didn\u2019t keep pace. What\u2019s changing now is that venture is building a more complete liquidity toolkit \u2014 M&A, secondaries, and IPOs working together.\u00a0<\/p>\n
That\u2019s critical when founders are committing 10, 15, even 20 years to building companies. At the same time, we\u2019re seeing real structural shifts in core sectors. Financial technology, especially stablecoins, moved from experimentation to mainstream adoption in 2025, particularly in markets like Latin America and Africa. In those places, this isn\u2019t speculative technology; it\u2019s infrastructure. That combination is why 2026 looks like a strong year to be deploying capital.<\/p>\n
Bankyia<\/strong><\/p>\nWe\u2019re still searching for phenomenal European founders building groundbreaking companies. Great companies are formed in all cycles.<\/p>\n
What will happen to all the\u00a0investor\u00a0and\u00a0startup interest\u00a0in AI next year?\u00a0<\/p>\n
Norman\u00a0<\/strong>\u00a0<\/p>\nIn 2026, the \u201cAI curiosity\u201d that fueled the last two years is being replaced by a demand for application and scale. We are moving from the era of building models to the era of building businesses. The fastest, most innovative companies aren\u2019t the ones with the largest LLMs; they are the ones using AI to solve high-value, domain-specific problems that were previously too complex or too manual to scale. Investors aren\u2019t looking for \u201cAI startups\u201d anymore; we\u2019re looking for exceptional tech founders who have found a way to use this intelligence to 10x the efficiency of a massive, traditional market.<\/p>\n
Blumberg\u00a0<\/strong>\u00a0<\/p>\nWe expect investor and startup interest to continue at all-time highs. However, I do think we will start to see tuck-in acquisitions, acquihires, and wind-downs in highly concentrated sectors such as coding automation, sales automation, marketing, and advertising as market share starts to concentrate in select assets.\u00a0\u00a0<\/p>\n
Taylor\u00a0<\/strong>\u00a0<\/p>\nIt will continue. But by the end of 2026, I predict AI will stop being a separate category, as it will just be a part of all new technology companies being built.\u00a0<\/p>\n
There\u2019s a lot of breathless talk about AI right now \u2014 and that\u2019s understandable. We\u2019re still very early in understanding what this technology will actually change. In moments like this, excitement tends to run ahead of clarity. Some companies will be transformational, many won\u2019t, and pricing will take time to adjust as real use cases emerge. The opportunity isn\u2019t in labeling everything as \u201cAI.\u201d It\u2019s in understanding where AI meaningfully changes cost structures, speed, or decision-making inside real businesses. That\u2019s where durable value gets created.<\/p>\n
This is one of those moments when the fog is thick, and that\u2019s when outcomes diverge the most.\u00a0<\/p>\n
Chang <\/strong><\/p>\nI don\u2019t see it slowing down anytime soon. We\u2019ve seen a lot of dollars go into infrastructure and theory; this year we\u2019ll see a lot more of that investment more clearly turn into enterprise value at the application level.<\/p>\n
Bankyia<\/strong><\/p>\nAI will remain a hot topic, barring negative hard catalysts that dramatically change conditions, like an energy crisis or a rise in default rates.<\/p>\n
What is something unexpected that could happen in 2026 in the world of venture and startups?\u00a0<\/p>\n
Norman\u00a0<\/strong>\u00a0<\/p>\nOne of the most unexpected shifts of 2026 will be the quiet end of the \u201cChatGPT-first\u201d era in startups. Not because generative AI loses importance, but because no single model remains the default starting point. GPT is no longer consistently best-in-class for search, image generation, or video, which fundamentally changes how tech companies architect their products. The savvy founders in 2026 have already graduated to a multi-model world, and instead their focus has shifted to specialization.\u00a0<\/p>\n
For example, Anthropic has effectively captured the developer\u2019s mindshare because Claude Code is better at building with you, and Google has finally activated its structural advantages. With Gemini 3, it\u2019s pairing top-tier image and video generation with deep multimodal capability and native access to Google\u2019s search and data ecosystem. That combination is proving hard to compete with. Model choice becomes an infrastructure decision, not a moat. The winners in 2026 won\u2019t be the companies that \u201cuse GPT,\u201d but the ones that orchestrate multiple models seamlessly, abstract complexity away from users, and build proprietary workflows on top.<\/p>\n
Blumberg\u00a0<\/strong>\u00a0<\/p>\nWe expect to see many successful startups built with only one or two rounds of capital. AI tooling (especially coding automation) enables many early-stage companies to accomplish profitability without excessive burn. From a technology perspective, while LLMs are expected to be everywhere, companies will start to scale back usage in favor of more controlled use as enterprises prioritize explainability, cost, and reliability. This could drive heavier use of small models, deterministic and probabilistic hybrid models, world models, or simulation modeling.<\/p>\n
Taylor<\/strong>\u00a0<\/p>\nThe end of the Russia-Ukraine war will bring about a renaissance of investing in Ukrainian founders, who are some of the best in the world! Two additional things will genuinely surprise people. First, international companies \u2014 especially from Latin America \u2014 going public in New York at scale. Second, major technology IPOs coming out of the Middle East, listed locally. When companies like Tabby go public on the Saudi Stock Exchange (Tadawul), it will reset expectations about where global tech leadership lives.<\/p>\n","protected":false},"excerpt":{"rendered":"Each year, we ask some top investors what they think\u00a0the next year will bring. Last year,\u00a0some investors thought…\n","protected":false},"author":3,"featured_media":322633,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[64,607,11302,1595,67,132,68,4502],"class_list":{"0":"post-478657","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entrepreneurship","8":"tag-business","9":"tag-entrepreneurship","10":"tag-predictions","11":"tag-startups","12":"tag-united-states","13":"tag-unitedstates","14":"tag-us","15":"tag-venture"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115805285570437082","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/478657","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=478657"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/478657\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/322633"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=478657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=478657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=478657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}