Many of the assumptions investors made about 2025 proved accurate: capital stayed cautious, later-stage funding remained tight, while pre-seed and seed deals held up under more rational valuations. To understand how this year actually unfolded for investors and which dynamics are likely to define 2026, Vestbee spoke with leading regional venture capital firms representing different investment angles, including early-stage investor Flyer One Ventures, late-seed and Series A fund Rockaway Ventures, seed to Series B defence and dual-use investor Keen Venture Partners, Raiffeisen Bank’s corporate venture arm Elevator Ventures, and growth equity and venture debt firm Orbit Capital.
They shared how fundraising realities, valuation pressure, and AI-driven competition affected their investment decisions in 2025, and gave some advice on what founders should prioritize to stay competitive next year.
Elena Mazhuha, Partner at Flyer One Ventures
Key highlights from 2025
2025 unfolded differently than we expected. Summer was very busy, and spring went fully into fundraising. We became the first Ukrainian fund backed by both EBRD and IFC. So we had to adapt our operations to match this level. At the same time, we worked on automation. This was a separate priority. We rebuilt parts of our deal-sourcing and due diligence processes, which required changes across the whole fund.
Next year, we’ll keep things basic and focus on capital efficiency for us and for the portfolio. Early deals in CEE are becoming more competitive, and we want to win whenever we can. On the operations side, we’re improving how we generate deal flow. There is a lot of capital focused on early stages across Europe and beyond, and many funds are now actively competing for CEE founders in particular. We want to win those fights.
Trends that will define 2026
2025 is set to be one of Europe’s busiest years for new deals, helped by lower interest rates and the fact that investors finally accept that uncertainty isn’t going anywhere.
Valuations, and check sizes keep rising. The top 1 percent of AI founders set a new bar this year. A $10–20 million pre-seed or seed round used to sound crazy. Now it happens. A strong founder with a real track record gets a large check from a tier-1 VC. I don’t expect this to change soon. AI hype is still strong and deals feel speculative. But the smartest investors are going back to defensibility and avoiding FOMO-driven deals at any cost.
What will change is what investors look at. Products are easy to build now, and anyone with some tech acumen can launch something quickly with AI tools. We'll look closely at real usage, stickiness, and proof and whether a startup is hard to copy. Defensibility becomes the main filter.
VC advice for founders entering 2026
My advice is the same in 2026 as it always was — build what people need and use. Ship, test, and don’t rely on fundraising as the main plan.
I often see founders building what they think investors want. That never works. Investor preferences change all the time. Today we don’t like blockchain, tomorrow we do. Focus on what your clients want and what they already pay for. The competition for their time and money will only grow. Same with AI. Don’t build AI just to say you’re in AI. To win, you need to solve real pain.
And the next thing — prioritize talent. If you’re building a real product company, your team matters the most. Great people are irreplaceable, no matter how much tech appears on the market. Talent and real product usage should always stay at the top of your priorities.
Max Palko, Principal at Rockaway Ventures
For us, 2025 proved to be a great year, and we managed to accomplish what we wanted. Now it is easier than before to build a startup if you can leverage AI and other new tech; this poses larger challenges when VCs want to find outliers amid a lot of noise (which is essentially a good thing). This means that we need to be more efficient and faster than before in assessing the investment opportunities.
Trends that will define 2026
There have been a lot of great examples showing that Europe can produce fast-growing tech companies that are able to compete with US companies. The US market is still very important for European startups, and successful European startups know it. Hence, it is important to continue in this trend.
VC advice for founders entering 2026
The competition will be fierce as more and more startups are being built. The tech talent is strong in the region, but the competition is global; hence, you need to attract the best not only with compensation but also by onboarding them to your mission, so it becomes their own.
Maximilian Schausberger and Magdalena Chalas, Elevator Ventures
Key highlights of 2025
At the beginning of the year, the whole world was testing the large language models, and the fantasies about what this would do to us in a very short time were limitless. At Elevator Ventures, we saw great opportunities for efficiencies within the team for our scouting, evaluation, and portfolio management as a fund. Throughout the year, we have tested plenty of tools, discussed with other funds, and, of course, with our portfolio companies.
Today, we are using AI in our operations as frequently as Excel, and it has indeed brought strong efficiency gains to our team and to our portfolio companies. Probably, we had expected it to be even faster and to become more ubiquitous. While human interaction is still the core of our VC activities and will continue to be for the foreseeable future, we will definitely continue to work on the latest AI developments next year.
Trends that will define 2026
This year, our team has seen over a thousand companies again, and we have identified different trends:
- The convergence of finance and operations into unified workflows shows that financial services are no longer delivered in isolation — credit, payments, invoicing, liquidity management, and compliance are increasingly embedded into the existing business software.
- Intelligence and automation create a shift from periodic, manual tasks to continuous, context-aware processes.
- Lastly, resilience becomes a strategic and competitive edge as the cost of failure rises, making reliability, compliance, and security fundamentals.
As already recorded in 2025, we assume the gap between early- and later-stage funding to continue its asymmetric character. Although seed funding has shown relative resilience, growth-stage funding in the CEE region has declined relative to the European median. Capital efficiency and well-educated, tech-savvy founders will most definitely remain one of their competitive advantages in 2026.
VC advice for founders entering 2026
The key to attracting growth capital remains demonstrating product-market fit, product-channel fit, and predictable monetization. In terms of competitiveness, founders will have to focus on differentiation — specifically in the fastest-growing markets such as AI, fintech, and energy tech.
This can be achieved through different angles, such as proprietary data (as Trustfull demonstrates), regulatory readiness (as shown by Tangany and Blockpit), or deep understanding of and integration with customer workflows (as Exnaton does).
Wiktor Namysł, General Partner at Orbit Capital
Key highlights of 2025
One of the most important themes was navigating the growing complexity around AI, understanding which companies were genuinely benefiting from AI and which were being threatened by it. As AI adoption accelerated, this distinction became increasingly critical for making sound investment decisions.
In the Polish market, much of the year was shaped by the waiting period for public funding sources to open and be formally confirmed. While this only happened toward the end of the year, it is likely to have a meaningful impact on the investment landscape in the years ahead.
Trends that will define 2026
This year, the CEE and broader European venture market was shaped by limited liquidity and a more disciplined approach to capital. We saw a notable increase in secondary transactions as funds and founders sought partial liquidity, alongside a continued focus on profitability and capital efficiency.
At the same time, there were early signs of recovery, with follow-on rounds returning for well-performing companies that raised capital three or so years ago, including many that are not AI-native. These dynamics are likely to remain relevant in 2026, as the market continues to reward strong fundamentals over narrative alone.
We also expect venture debt to play a significantly larger role, as founders and early-stage VCs become more comfortable using it alongside equity to extend runway and manage dilution.
On the equity side in CEE, we don’t anticipate meaningful changes in cheque sizes, as we don’t yet see the emergence of larger regional funds that would materially shift the market. Valuations are likely to remain closely tied to fundamentals, with the main exception being AI-related companies, where pricing continues to be influenced by US-driven valuation dynamics.
VC advice for founders entering 2026
Investors are becoming increasingly good at understanding how companies actually use AI. Whether a team is building core AI technology or thoughtfully applying existing tools, what matters most is being clear about where AI creates real, defensible value. That clarity tends to resonate more than broad claims around "proprietary AI."
Cost awareness will also matter more going forward. As AI infrastructure costs continue to rise, we’re starting to see the impact on gross margins. Founders should make sure these costs are clearly reflected in their P&L and unit economics, and that margin assumptions remain realistic as the business scales.
Sales and distribution remain critical, but the way customers discover, evaluate, and buy products is evolving. AI is increasingly part of that process, including more automated or agent-driven decision-making on the customer side. Founders who start adapting their go-to-market approach and internal processes to this shift will be better positioned for what’s ahead.
Giuseppe Lacerenza, Partner at Keen Venture Partners
Key highlights of 2025
The biggest challenge in 2025 was not deal flow or conviction; it was the speed of institutional alignment. Defence and security technologies moved from being "acceptable" to "strategic", but the machinery around them (procurement, regulation, LP mandates) still moves at a very different pace.
At the start of the year, we expected geopolitical urgency to translate more quickly into capital deployment and adoption. What actually happened was more nuanced: demand accelerated faster than the systems designed to absorb it. That gap between technological and institutional readiness became a defining theme of the year, reinforcing why specialist investors matter in this space.
Trends that will define 2026
Three dynamics stood out in 2025.
- First, sovereignty became an investment criterion rather than just a policy slogan. European buyers and governments increasingly care where technology is designed, manufactured, and controlled, particularly in defence, space, AI, and critical infrastructure.
- Second, dual-use moved from theory to practice. Startups that could serve both civilian and defence markets without diluting focus attracted disproportionate attention.
- Third, speed and manufacturability overtook "pure innovation" as differentiators. Technologies that could be produced, deployed, and iterated quickly gained an edge over more elegant but slower solutions.
All three will matter even more in 2026, especially as procurement timelines tighten and Europe becomes more selective about what it cannot afford to depend on externally.
At the same time, we expect continued bifurcation. Capital will be available, but unevenly distributed. Early-stage rounds in defence and security will remain active, but with smaller initial cheques and stronger milestone discipline. Valuations are unlikely to re-inflate broadly; instead, they will reward proof of adoption, not just technical promise.
At later stages, the bottleneck will be scaling capital with domain expertise. Companies that demonstrate credible customer pull, especially from government or large industrial players, will still raise meaningful rounds. Those who don’t will struggle, regardless of technical quality.
VC advice for founders entering 2026
Founders should prepare for a market that rewards clarity over ambition.
In fundraising, expect tougher questions on who actually buys, how fast procurement can happen, and what breaks at scale. Storytelling without evidence will be penalized.
Competition will intensify, especially as traditional defence players become more active in ventures and partnerships. Teams will need operational depth, not just engineering excellence, particularly in compliance, supply chain, and government interfaces.
Finally, go-to-market strategies must be realistic. In defence and security, distribution, trust, and integration matter as much as product performance. Founders who internalize that early will have a structural advantage.
