Due to New Years eve tomorrow, we’re sending out this edition today.
Back to normal program (Every Weds AM / Sunday PM) starting next week…
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Nic and I brought in the heavy hitters for some loving predictions on 2026. Let me know what your predicting for 2026. Reply to this email and let’s have some fun together…
But before that, we did damn good on our 2024 predictions, going 6/6. Last January, I put my neck on the line again with six bold calls for 2025. Now that we are closing out the year, it’s time to check the receipts.
My 2025 Predictions Scorecard
Six calls from January, scored against reality…
#1. IPOs explode, surpassing 2023 and 2024 but not ZIRP levels in 21 and 22.
Verdict: Close but not quite.
We definitely saw significantly more IPOs than the drought of 2024, but I wouldn’t say the market “exploded.” It was more of a steady stream than a fireworks show. Directionally accurate, but the magnitude was off.
#2. AI startup funding continues to be incredibly strong, significantly outpacing SaaS.
Verdict: Nailed it.
This was probably the easiest prediction on the list. If you weren’t pitching AI in 2025, you probably weren’t getting a term sheet. The gap between AI funding and traditional SaaS widened exactly as expected.
#3. We see A LOT MORE Venture Buyout concepts get funded. I’m guessing 30+ of them get backed by leading funds.
Verdict: Hit it out of the park.
I asked my AI research assistant to check the numbers, and we’ve seen over 50 of these deals announced. The “Venture Buyout now known as AI Roll Up” is officially a category.
#4. Interest rates drop into the high fives.
Verdict: This happened.
The Fed finally gave us some breathing room albeit not enough to really move the needle for most.
#5. Bitcoin hits $125K+ and then dips back down to <$100K.
Verdict: Almost perfectly called the chart pattern.
We hit right below $125k (around $120k) and then dipped hard back down to around $83k. I didn’t get the exact peak number, but the volatility thesis was spot on. I missed the drop we’ve seen more recently.
#6. Economy stays consistent with where it is now - big changes start to happen in 2026.
Verdict Relatively accurate.
We didn’t see a massive recession or a massive boom; it was consistent. The real fireworks are set for next year.
Vertical AI Winners of 2025
Who actually won the year?
Biggest Face Palms of 2025
Not everyone can be a winner
2026 Prediction #1:
What product/industry/company sees the fastest growth from 0 to $100M+ ARR in 2026
2026 Prediction #2:
Which Old Guard vSaaS is most likely to get disrupted or acquired in 2026?
2026 Prediction #3:
What 2026 IPO That Will Print Money?
2026 Prediction #5:
Under the Radar Trend for 2026
2026 Prediction #6:
Numbers Only. How many new Vertical Unicorns get minted? For context, 36 were minted in 2025.
2026 Prediction #7:
Wild Card Predictions. Anything is fair game…
The Great Debates We Need to Settle in 2026
Themes to watch that remain unresolved
AI Rollups: Can they achieve venture scale?
Luke says yes—if structured correctly to arbitrage the PE multiples. Omar is skeptical about asset price inflation killing the returns.
Service Titan: Loser or long-term winner?
Todd is bearish on the competition and product complexity. Omar is bullish on the 8% market penetration and the massive cross-sell opportunity (if they execute).
Domain Expertise vs. MBA Founders
The data is roughly a 50-50 split on success. But 10 years ago, “vertical software veterans” didn’t exist. Now there is a real ecosystem of talent.
Deep Tech: Bear case emerging
Nic is officially a bear. He sees it as a catch-all for capital-intensive, uncertain categories. The group was nodding in agreement.
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That’s a wrap on our 2025 scorecard and our look ahead for 2026. Be on the lookout for the full episode drop in the next few days. We’ve planted the flags. Now we just have to wait 12 months to see who gets to say “I told you so.”
Got a bold prediction we missed? Reply and let me know.
Let’s all have an epic 2026!!!
Luke
Have a product or service that would be great for our audience of vertical SaaS founders/operators/investors? Reply to this email or shoot us a note at ls@lukesophinos.com
