Why VCs Think 2026 Will Be the ‘Year of the Consumer’

Investment in consumer technology startups has been on the decline since 2022, as a turbulent macroeconomic climate and rising inflation made venture capital firms concerned about consumers’ spending power. Over the past couple of years, most AI investments have focused on winning enterprise customers, which offer large screenings, multi-year contracts, and fast paths to expansion.

But one venture capitalist sees the consumer sector poised for a comeback in 2026.

“This is going to be the year of the consumer,” Vanessa Larco, a partner at venture firm Premise and former NEA partner, said on this week’s episode of the Equity podcast.

Although companies have big budgets and a feverish desire to implement AI solutions, adoption often stalls because “they don’t know where to start,” Larco says.

“The fun thing about consumer and consumer…is that people are actually thinking about what they want to use it for,” Larco continued. “So they buy it, and if it meets a need, they keep using it.”

In other words, adoption is faster, and startups making AI products don’t have to guess whether they’ve already achieved product-market fit or just won a contract.

“If you’re selling to consumers, you’ll know very quickly whether the product meets a need or not, and you’ll know very quickly whether you need to pivot your product or make some changes to it or scrap it completely and start with something completely different,” Larco said.

In today’s turbulent economy, consumer technology products that have managed to expand show a particularly strong product-market fit.

There are early signs that consumer technology is having a moment. Late last year, OpenAI launched apps in ChatGPT, allowing users to shop with the Target app, research the housing market with Zillow, book trips with Expedia, or create a Spotify playlist, all through the ChatGPT chatbot experience.

“AI will be concierge-like services that will do everything you can think of for you,” Larco said. “The question is, which ones should be specialized, and which ones should be general purpose?”

Or to put it another way, as OpenAI works to make ChatGPT the new operating system for the consumer internet, which legacy companies — like Tripadvisor or WebMD — will continue to exist in their own right, and which will OpenAI eat away?

While Larco believes 2026 will be an “interesting” year for M&A, she is interested in investing in startups that OpenAI “wouldn’t want to kill.”

“OpenAI does not manage real-world assets,” she said. “I don’t think they’ll build a competitor to Airbnb because I don’t think they’ll want to manage homes… I don’t think they’ll build any of these marketplaces that require real humans because they don’t want to manage humans.”

Aside from startups that could fill the gaps, Larco is keeping an eye on what happens if OpenAI decides to “pull an Apple or Android where you get a 30% cut of all the traffic they send you.”

“Does Airbnb want to play ball with that?” I asked.

Overall, Larco expects new monetization strategies and new business models to emerge from the evolving online consumer experience.

“Society must change”

While scrolling on Instagram about Trump’s arrest of Venezuelan leader Nicolas Maduro, Larco noticed something. She had come to the platform for news about the escalating crisis, but instead, she was overwhelmed by Maduro’s AI-generated torrent.

Although deepfakes have become steadily more prevalent on social media, this was one of the first major news events where AI-driven regression muddied the waters of truth.

“At that point, I was like, ‘If I’m going to watch AI-generated videos and photos, I want it to be funny,’” she said.

Larco says she’s been inundated with enough realistic-looking AI videos on social media that she assumes it’s all about AI at this point, and she’s not alone. If we all start assuming that nothing we see on Meta or TikTok platforms is real anymore, the question will be, where do you get the real stuff?

Others may fill the gaps regarding where to find honest, non-AI content, as platforms like Reddit and Digg take steps to verify humanity, Larco says. But for Meta? Maybe it will just become an entertainment company, or a platform for user-generated short films.

“I think we should move on from getting your news [Meta]”You just get funny videos from there,” Larco said. “It’s not social media. It’s just gaming and entertainment media.”

“Some things are better with sound than on screen.”

When Meta acquired AI startup Manus last week, many saw it as an enterprise play. Larco thinks it could be a move aimed at improving Meta’s Ray-Ban smart glasses, a product she’s a huge fan of because it allows her to answer phone calls, respond to messages, take photos and videos, and ask Meta AI questions, all without having to pull out her phone and swipe across the screen.

Larco says she believes truly useful voice AI assistants are finally “on the verge of happening,” fueled by more advanced technology and more powerful computing.

“Some things are better with sound than on screen,” she said. “And because the sound was bad, we needed the screen as a crutch. But I like to start separating the things that are really better on screen and the things that are better with sound.”

Get answers to the questions her children ask about what is the tallest building? Definitely vote. Pulling out her phone to type the question now seems “archaic,” Larco said.

“I think it’s going to be really fun for designers because they’ll finally be able to choose the best form factor for their use cases,” she said.