Investment in consumer tech startups has been in a downturn since 2022, as a turbulent macroeconomic climate and rising inflation have made VCs skittish about consumer spending power. For the past couple of years, most AI investment has focused on winning over enterprise customers, who provide fat checks, multi-year contracts, and quick paths to scale.
But one VC sees the consumer sector gearing up for a comeback in 2026.
“This is gonna be the year of the consumer,” said Vanessa Larco, partner at the venture firm Premise and a former partner at NEA, on this week’s episode of the Equity podcast.
Larco says that even though enterprises have big budgets and a frantic desire to implement AI solutions, adoption often stalls because “they don’t know where to start,” Larco says.
“The fun thing about consumer and prosumer…is that people already have in mind what they want to use it for,” Larco continued. “And so they purchase it, and if it meets the need, they just keep using it.”
In other words, adoption is quicker, and startups building AI products don’t have to guess whether they’ve actually achieved product-market fit or have just won a contract.
“If you’re selling to consumers, you’ll know very quickly if it’s fitting a need or not, and you’ll know quickly whether you need to pivot or make some changes to your product or totally scrap it and start something totally different,” Larco said.
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And in today’s anxiety-inducing economy, consumer tech products that manage to scale demonstrate an especially strong product-market fit.
There are early indications that consumer tech is having a moment. Late last year, OpenAI launched apps in ChatGPT, allowing users to shop with the Target app, scour the housing market with Zillow, book trips with Expedia, or make a Spotify playlist, all through the ChatGPT chatbot experience.
“AI is gonna feel like concierge-like services, which will do everything for you that you have in mind,” Larco said. “The question is, which of …