PitchBook’s latest analysis, the VC Emerging Opportunities report, has provided a quantitative framework for evaluating key technology verticals. Authored by Andrew Akers, CFA, and Susan Hu, the study combines bottom-up machine-learning predictions from the firm’s VC Exit Predictor model with top-down macroeconomic indicators to help investors assess risks and returns in seed-to-Series B companies.
Data reflects the global landscape as of December 31, 2025, focusing on firms with at least two prior VC rounds.
The report examines more than 25,000 early-stage companies across verticals, including AI (8,933 companies), SaaS (5,476), fintech (2,852), climate tech (2,648), healthtech (1,331), gaming (1,010), cybersecurity (1,048), defense tech (839), agtech (1,116), medtech (822), and supply chain tech (470).
Overall, trailing 12-month early-stage deal value rose 17.5% cross-vertical, while median pre-money valuations climbed 28.8%.
First-time financings, however, fell 19%, signaling greater investor selectivity amid economic uncertainty.
Using the VC Exit Predictor, which forecasts acquisition, IPO, or no-exit probabilities for individual companies and aggregates them at the vertical level, the report projects a cross-vertical average annualized expected return of 21.2% (a historical baseline, not a forecast).
SaaS leads decisively, outperforming the average by 4.6 percentage points with a 72.1% successful-exit probability—5.7 points ahead of the next vertical and the top rank for at least eight consecutive years.
Its large opportunity set and steady top-tier investor participation (up 2.7% TTM, reaching 19.4%) further bolster its appeal, though patent activity remains relatively flat at 12.9% of total filings.
Defense tech follows closely, posting the second-largest year-over-year improvement in expected returns (+2.7 points) and an aggregate 24% return outlook.
It recorded the highest median pre-money valuation ($101.3 million, up 38.4% TTM) and strongest employee growth (10.6% versus the 6.7% cross-vertical average), reflecting scaling from deployment momentum and sustained elite-investor interest (20% participation).
AI ranks in the upper tier (+0.8% above average) despite ongoing debates about valuation exuberance.
Deal value surged 41.2% to $64.4 billion TTM—the highest absolute figure—while the vertical captured 37.2% of all published patents, the largest share by far.
First-time financings edged up 0.4% against a broader decline, underscoring durable momentum driven by platform leaders, though returns remain concentrated.
Cybersecurity (+1.0%) and supply chain tech (+0.9%) occupy neutral-to-positive positions, with cybersecurity showing valuation strength ($62.3 million median) and supply chain tech posting the largest valuation expansion (+49.9% TTM).
Climate tech sits near the average (-0.2%), benefiting from 16.5% patent share growth but facing flat deal activity.
Laggards include agtech (-3.4%), gaming (-2.1%), and healthtech (-1.9%). Agtech saw deal value contract 9.2% to $4.2 billion amid farmer-margin pressures.
Gaming stabilized after sharp post-2022 declines but new company fundings dropped 46.1%, with median valuations rising selectively to $56.4 million on AI-tooling interest.
Healthtech funding reached $15.3 billion (up 26.1% YoY) with AI agents dominating early flows, yet expected exits lag.
The report emphasizes that relative performance metrics—unaffected by broad ecosystem factors like interest rates—offer the most reliable forward-looking signals.
SaaS and defense tech provide the clearest outperformance potential, while AI offers scale but with concentration risk.
Investors are advised to prioritize verticals with strong exit probabilities, rising valuations, and innovation signals, using the data to inform balanced early-stage allocations.
In a market still navigating recovery and technological disruption, PitchBook’s dual-lens approach now aims to equip limited partners and venture firms with objective benchmarks to identify resilient opportunities.