The consensus view heading into 2026 is cautious: interest rates remain elevated, buyers are scrutinizing every software renewal, and the frothy multiples of 2021 are a distant memory.
We have a different read.
The Denominator Has Reset — and That Is Good
When software multiples compressed in 2022 and 2023, it forced a generation of SaaS founders to focus on something they had been allowed to ignore during the zero-rate era: unit economics. Companies that survived the reset did so by building fundamentally better businesses — tighter CAC, higher NRR, cleaner gross margins.
The companies we are seeing at Series B today are operating with a discipline we rarely saw in 2019 or 2020. That is not a bad thing for long-term investors.
AI Is a Tailwind, Not a Threat
There is a lot of hand-wringing about AI commoditizing SaaS. We are not seeing it in our portfolio. What we are seeing is that the best software companies are embedding AI into their products faster than their customers can absorb it — and every AI feature that gets adopted deepens switching costs.
Flowlink added AI-suggested workflow templates in Q3 2025. They saw a 22-point improvement in activation rates within 60 days. That is not commoditization. That is compounding.
Where We Are Looking
For Fund IV deployment in 2026, we are focusing on three areas:
- Vertical AI applications in regulated industries — healthcare, financial services, legal. These sectors have the highest willingness to pay and the highest barriers to entry for model-only competitors.
- Infrastructure for the AI-enabled enterprise — the picks-and-shovels layer that makes AI applications actually work in enterprise environments (data pipelines, compliance tooling, observability).
- Post-AI-hype SaaS — companies that were in market before the AI wave, have strong product-market fit, and are now embedding AI in ways that measurably improve retention and expansion.
If you are building in one of these categories and approaching a Series B or growth round, we would love to hear from you.
