Observed Signal · Feb 21, 2026 · Market Commentary · Source: Ed Sim (IT/VC) · Impact: 3/5 · Sentiment: Neutral
LPs Pivot to Deep Tech as AI Concentrates Capital
A newsletter recap of a StepStone annual meeting and wider industry signals argues venture capital is concentrating heavily into AI-native and deep‑tech companies, accelerating a widening performance gap between firms with AI tailwinds and legacy software. LPs and GPs signalled preference for physical AI, robotics, agent-native infrastructure and defense/space investments over thin software layers. The author cites data showing markedly higher revenue growth and valuation multiples for companies with AI momentum, high concentration of deal value in foundation models, and an increasingly bifurcated VC returns landscape. The piece highlights agentic AI concepts (skills, package managers, agent orchestration), endpoint security responses (e.g., Palo Alto Networks’ intent to acquire Koi), and product moves like Airtable’s Hyperagent and developer tooling such as Tessl. The bottom line: speed, scale and concentration are reshaping where durable enterprise value will accrue.
Signals a meaningful shift in VC and enterprise demand toward agentic AI, deep tech and infrastructure (security, agent orchestration) that will affect vendor selection and product roadmaps across enterprise and MarTech stacks.
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Key Takeaways & Evidence Grounding
- StepStone annual meeting convened LPs and GPs for ~48 hours with 600+ investors in attendance.
- Companies without AI tailwinds: 14% revenue growth, 3.1x EV/NTM multiple, 1.0x return since IPO; companies with AI tailwinds: 27% revenue growth, 9.8x multiple, 8.6x return since IPO.
- 22% of all deal value is concentrated in foundation models; the top 10 private VC‑backed companies created value equal to 112% of all exits in the past decade.
- LPs reported rotation toward deep tech, Physical AI, robotics and infrastructure for the 'Autonomous Enterprise' versus thin software layers.
- Industry moves referenced include Airtable announcing Hyperagent and Palo Alto Networks announcing intent to acquire Koi to secure agentic endpoints; Tessl launched as a package manager for 'skills'.
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