Investment in consumer tech startups has been in a downturn since 2022. A turbulent macroeconomic climate and rising inflation have made venture capitalists cautious about consumer spending power. For the past couple of years, most AI investment has focused on winning enterprise customers, who provide large contracts and quick paths to scale. However, one venture capitalist sees the consumer sector gearing up for a comeback in 2026.
Vanessa Larco, a partner at the venture firm Premise, predicts that 2026 will be the year of the consumer. She notes that while enterprises have big budgets and a desire to implement AI, adoption often stalls because they do not know where to start. The consumer and prosumer markets are different. People already know what they want to use AI for, so they purchase it and, if it meets their need, they keep using it.
This means adoption is quicker. Startups building AI products do not have to guess if they have achieved product-market fit or just won a contract. When selling to consumers, you know very quickly if your product fits a need. You know quickly whether to pivot, make changes, or scrap the idea entirely. In today’s economy, consumer tech products that manage to scale demonstrate an especially strong product-market fit.
There are early signs that consumer tech is having a moment. Late last year, OpenAI launched apps within ChatGPT, allowing users to shop, scour the housing market, book trips, or make playlists through the chatbot. Larco believes AI will feel like concierge services that do everything for you. The question is which services should be specialized and which should be general purpose.
As OpenAI works to make ChatGPT a new operating system for the consumer internet, a question arises: which legacy companies will continue to exist in their own right, and which will be absorbed by OpenAI? Larco thinks 2026 will be a significant year for mergers and acquisitions. She is interested in investing in startups that OpenAI is not going to want to eliminate.
She points out that OpenAI does not manage real-world assets. She does not think they will build an Airbnb competitor because they would not want to manage homes. She does not believe they will build marketplaces that require managing real humans. Beyond identifying which startups can fill these gaps, Larco is watching to see if OpenAI decides to take a percentage of all the traffic it sends to other businesses, similar to app store models. She wonders if companies like Airbnb will agree to such terms.
Overall, Larco predicts new monetization strategies and business models will emerge from the evolved consumer experience online.
Larco also observes that social media has to change. During a major news event, she went to Instagram for information but was flooded with AI-generated content that muddied the waters of truth. She noted that if she is going to watch AI-generated videos and photos, she wants them to be entertaining. She now often assumes content on platforms like Meta or TikTok is AI-generated.
If everyone assumes that nothing on these platforms is real, the question becomes where to find truthful, non-AI content. Larco suggests other platforms may fill this gap by verifying humanity. For Meta, she thinks it may simply become an entertainment company, a platform for user-generated short films rather than a source for news.
Regarding technology interfaces, Larco is a fan of Meta’s Ray-Ban smart glasses because they allow her to perform tasks without using a screen. She believes truly useful voice AI assistants are finally on the cusp of happening, fueled by more advanced technology. Some things are better with voice than a screen. Because voice interaction was previously poor, screens were used as a crutch. She looks forward to designers separating what is better on a screen from what is better with audio.
For example, getting quick answers to questions from her children is definitely a voice task. Taking out a phone to type a question now feels archaic. She thinks it will be exciting for designers to finally choose the best form factor for different use cases.