The AI startup market ranges from companies looking to develop new chips, to companies using AI to build robots, to companies looking to use AI to create niche solutions for industry-specific workflows. It's sprawling. There are many potential areas in which venture capitalists can invest, but there are clearly some subsectors that are more interesting than others.
TechCrunch recently surveyed 20 VCs investing in startups looking to sell to enterprises about their predictions for 2025.
Mark Rostick, vice president and senior managing director at Intel Capital, told TechCrunch that, at least in his opinion, now that the large-scale foundational model is established, the next interesting area to invest in is task-specific He said it is an AI solution.
“I think models that are good at specific capabilities are particularly interesting, especially when combined with agents built on top of them,” Rostick says. “As AI adoption accelerates, CEOs are increasingly looking for ways to leverage AI in specific areas to have measurable and transformative impact, with applications-focused companies taking center stage. I will be in charge.”
This is a sentiment echoed by Mike Hayes, managing director of Insight Partners. He added that he intends to support companies that develop products that use AI to reduce business friction.
“I look for solutions that solve unique orthogonal challenges for businesses, areas where traditional solutions fall short,” Hayes said. “This includes vertical, person-specific workflows reimagined with GenAI or agent automation and security innovations that not only identify and alert, but also remediate.”
VCs interested in going after companies that target specific enterprise use cases need to make sure that these startup solutions actually belong to the company and not just a feature. If not, we may see a repeat of the SaaS boom in 2021. At that time, many companies that were really single-function companies raised significant amounts of venture capital funding and were left behind in favor of companies offering platform solutions when corporate budgets shrunk in 2023. Ta. .
Of course, some tasks are important enough to justify a single-function solution. When it comes to SaaS, the overwhelming consensus is that businesses will still pay companies to provide specific cybersecurity solutions. When it comes to AI, it is not yet clear at what point companies will be willing to pay for a solution. Ed Sim, founder and general partner of Boldstart Ventures, acknowledges this challenge.
“The trick is to skate where the puck is and really think about whether this is a feature, a product or a business,” Sim said.
Another area that VCs are focusing on is reliability and resiliency. Jason Mendel, an investor at Battery Ventures, said he is looking to invest in companies in the observability and reliability space. Rylan Grinberg, co-founder and managing partner of Team8, is also looking at what he calls “enterprise resilience.”
“The CrowdStrike software update incident showed how vulnerable our digital world is, not only due to cyber attackers but also due to simple mistakes,” Greenberg said. “We need a digital infrastructure that is more resilient and less vulnerable by design.”
AI infrastructure will continue to be a hot investment area in 2025. As advances are made with AI agents, VCs say they are looking at companies that can help price AI agents, as well as the infrastructure needed for companies to deploy the technology. .
“Although still in its early stages, momentum in AI infrastructure is expected to increase by 2025, especially with the proliferation of agent frameworks, the development of new model paradigms (including inference), advances in edge AI, and the evolution of UI/UX for AI applications.” “We believe this will continue into 2020,” said Janelle Teng, vice president at Bessemer Venture Partners.