𝗪𝗵𝗲𝗿𝗲 𝗶𝘀 𝘁𝗵𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀’ 𝗮𝘁𝘁𝗲𝗻𝘁𝗶𝗼𝗻 𝗵𝗲𝗮𝗱𝗶𝗻𝗴 𝗶𝗻 𝟮𝟬𝟮𝟲?

🔹𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗮𝗿𝗲 𝗼𝗯𝘀𝗲𝘀𝘀𝗶𝗻𝗴 𝗮𝗯𝗼𝘂𝘁 𝗲𝘅𝗶𝘁𝘀 – Most are suffering from showing to little cash back to their LPs. Yes, the M&A market is experiencing a rebound, but this is driven by very large deals. Smaller transaction are still subdued. Yes, IPOs are making a comeback, but again it is driven by the very large companies.

🔹𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗮𝗿𝗲 𝗳𝗼𝗰𝘂𝘀𝗶𝗻𝗴 𝗼𝗻 𝗹𝗮𝗿𝗴𝗲 𝗼𝘂𝘁𝗰𝗼𝗺𝗲𝘀 – Product plays are great, but what investors really want is companies which have a shot at becoming unicorns (>$1bn valuation) or, even better, decacorns (>$10bn). In 2025 alone, more than 100 US companies became unicorns - approximately half the number of European unicorns today. And investors able to support these very large bets. In January came the news that Andreessen Horowitz had raised $15bn in new funding, representing close to 1/5th of all US venture funding in 2025.

From a sector standpoint, AI and defence are obviously all the rage:
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🔹𝗔𝗜 is the investment theme that keeps giving (approximately half of the investors’ dollars went into AI in 2025):

⚫𝗔𝗜 𝗶𝘁𝘀𝗲𝗹𝗳: foundation models - with a big battle between “closed models” (US) and open source models (a China speciality – with Mistral in Europe); application layers – with a key question mark as to the defensibility of the position as foundation models incorporates new applications; agentic AI – the new buzzword, but essentially it is giving the keys to AI to not only create nice outputs, but also actions (with or without a human in the loop).

⚫𝗜𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝘁𝗼 𝗱𝗲𝗹𝗶𝘃𝗲𝗿 𝗔𝗜: Data Centers (DCs) of course, but also all that is required to fire up these DCs, including the chips (compute and memory) and the energy (lots of it – hence the renewal of nuclear energy). Beyond current technologies, many bets on tomorrow’s, in energy (fusion), accelerated computing (what will challenge GPUs; how quickly optics will get into semis, etc), and of course quantum computing (hiding somewhat the application of quantum to sensing and communications).

🔹𝗗𝗲𝗳𝗲𝗻𝗰𝗲. The numbers are staggering: European defence expenses are set to grow from 2% to 5% of GDP per annum. That’s at least another $500bn (about 10x the size of the annual VC market), which prime contractors (the cost-plus type) and new upstarts are vying for. Among the areas of interest: drones (600 startups in Europe and counting); cyber (making existing infrastructure more resilient to attacks); new space/telecoms (building the European alternative to SpaceX/Startlink), etc. Behind it all the idea to recycle off-the-shelf commercial technology (“dual use”) and shaking up procurement process (easier said than done).

As usual, better swim with the tide!
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Sources
‍https://www.a16z.news/p/state-of-markets‍
‍https://techcrunch.com/2026/01/12/at-least-36-new-tech-unicorns-were-minted-in-2025-so-far
/‍https://techcrunch.com/2026/01/09/the-venture-firm-that-ate-silicon-valley/