The AI startup market is sprawling, from companies looking to develop new chips, to those using AI to build robots, to others looking to use AI to create niche solutions for industry-specific workflows. There are a lot of potential areas for venture capitalists to invest in, but there are clearly a few subsectors they are more excited about than others.
TechCrunch recently surveyed 20 VCs who invest in startups looking to sell to enterprises about their predictions for 2025.
Mark Rostick, a vice president and senior managing director at Intel Capital, told TechCrunch that now that the large foundational models have been established — at least in his opinion — the next interesting area to invest in is AI solutions for specific tasks.
“I find models that excel at specific functions particularly intriguing, especially when combined with agents built on top of them,” Rostick said. “As AI adoption accelerates, application-focused companies will take center stage, as CEOs increasingly seek ways to leverage AI in specific areas that deliver tangible, transformative impact.”
This was echoed by Mike Hayes, a managing director at Insight Partners. He added that he’ll be looking to back companies building products that use AI to reduce business friction.
“I look for solutions that solve unique, orthogonal challenges for enterprises — areas where traditional solutions have fallen short,” Hayes said. “This includes vertical and persona-specific workflows reimagined with GenAI or agentic automation and security innovations that do not only identify and alert, but also remediate.”
VCs interested in going after companies that target specific enterprise use cases will have to make sure these startup solutions are in fact companies, as opposed to just features. Otherwise, we could see a repeat of the SaaS boom in 2021, when a lot of companies that were really just one-note features raised oodles of venture capital before being left behind in favor of companies that offered platform solutions when enterprise budgets contracted in 2023.
There are of course tasks that are important enough to warrant a single-feature solution. For SaaS, we overwhelmingly heard that enterprises would still pay for companies offering specific cybersecurity solutions. For AI, what point solutions enterprises will be willing to pay for isn’t clear yet. Ed Sim, the founder and general partner at Boldstart Ventures, acknowledged this challenge.
“The trick is skating to where the puck will be and also thinking through is this a feature, or a product, or a business,” Sim said.
Another area VCs are excited about is reliability and resiliency. Jason Mendel, an investor at Battery Ventures, said that he’s looking to invest in companies in the observability and reliability space. Liran Grinberg, the co-founder and managing partner at Team8, also has his sights set on what he calls “enterprise resilience.”
“The Crowdstrike software update incident demonstrated how fragile our digital world is, not only due to cyber attackers but also just mistakes,” Grinberg said. “We need more resilient, anti-fragile digital infrastructure by design.”
AI infrastructure will also remain a hot area of investment in 2025. VCs cited that with the advancements regarding AI agents, they are looking into the infrastructure needed for enterprises to adopt the tech in addition to companies that can help figure out pricing for AI agents too.
“It’s still very early innings here, and I believe that momentum for AI infrastructure will continue into 2025, particularly as agentic frameworks proliferate, new model paradigms (including reasoning) develop, edge AI advances, and UI/UX of AI applications evolve (including computer use),” Janelle Teng, a vice president at Bessemer Venture Partners, said.
