Investments in consumer tech startups are on a downward trend from 2022 as a turbulent macroeconomic climate and rising inflation have VCs thinking about consumer power. Over the past couple of years, most investment in AI has focused on attracting enterprise customers, who provide paychecks, multi-year contracts and fast paths to scale.
But one VC sees the consumer sector gearing up for a comeback in 2026.
“This is going to be the year of the consumer,” Vanessa Larco, a partner at venture firm Premise and a former partner at NEA, said on this week’s episode of the Equity podcast.
Larco says that even though businesses have big budgets and a frantic desire to implement AI solutions, adoption often lags because they “don’t know where to start.”
“The fun thing about the consumer and the buyer … is that people already have in mind what they want to use it for,” Larco continued. “And so they buy it and if it meets the needs, they just keep using it.”
In other words, adoption is faster, and startups building AI products don’t have to guess whether they’ve actually achieved product-market fit or whether they’ve just won a contract.
“If you’re selling to consumers, you’ll know very quickly if it’s meeting a need or not, and you’ll know quickly if you need to pivot or make some changes to your product or scrap it completely and start something completely different,” Larco said.
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And in today’s stressful economy, consumer tech products that manage to scale demonstrate particularly strong product-market fit.
There are early signs that consumer technology is having a moment. Late last year, OpenAI launched apps on ChatGPT, allowing users to shop with the Target app, search the home market with Zillow, book travel with Expedia, or create a Spotify playlist, all through the ChatGPT chatbot experience.
“Artificial intelligence will be like concierge services, doing everything for you that you put in your mind,” Larko said. “The question is which of these should be specialized and which should be general purpose?”
Or else, as OpenAI works to make ChatGPT the new operating system of the consumer Internet, which legacy companies — like Tripadvisor or WebMD — will continue to exist on their own and eat OpenAI?
While Larco believes 2026 will be a “gagbuster” year for mergers and acquisitions, it is interested in investing in startups that “OpenAI is not going to want to kill.”
“OpenAI doesn’t manage real-world assets,” he said. “I don’t think they’re going to build an Airbnb competitor because I don’t think they’re going to want to manage homes … I don’t think they’re going to build any of these marketplaces that require real people because they don’t want to manage people.”
Beyond which startups can fill the gaps, Larco is wary of what will happen if OpenAI “decides to pull an Apple or Android where they cut 30% of all the traffic they send you.”
“Will Airbnb want to play ball with this?” she asked.
Overall, Larco foresees new monetization strategies and new business models will emerge from the evolving online consumer experience.
“Social needs to change”
While doomscrolling on Instagram about Trump’s arrest of Venezuelan leader Nicolas Maduro, Larco noticed something. He had come to the platform to get news of the escalating crisis, but was instead overwhelmed by slop Maduro created by AI.
While deepfakes are steadily becoming mainstream on social media, this was one of the first major news events where artificial intelligence muddied the waters of truth.
“At that point, I was like, I’m watching AI-generated videos and photos, I want it to be funny,” he said.
Larco says she’s been inundated with enough realistic AI videos on social media that she just assumes it’s all AI at this point, and she’s not alone. If we all start to assume that nothing we see on the Meta platforms or on TikTok is real anymore, the question becomes, where do you get the real stuff?
Larco says others may fill the gaps in where you’ll find real content without AI, as platforms like Reddit and Digg make moves to verify humanity. But for Meta? Maybe it will just become an entertainment company, a platform for user-generated short films.
“I think we need to move on from getting your news [Meta]” said Larco. “You just get funny videos from there. It’s not social media. It’s just gaming and entertainment.”
“Some things are better in voice than on screen“
When Meta acquired AI agent startup Manus last week, many saw it as a business play. Larco believes it could be a move aimed at improving Meta’s Ray-Ban smart glasses, a product the VC is a big fan of because they let her answer phone calls, respond to messages, take photos and videos, and ask Meta AI questions, all without having to take out her phone and navigate the screen.
Larco says it believes truly useful AI voice assistants are finally “on the cusp,” powered by more advanced technology and more powerful computers.
“Some things are better with voice than screen,” he said. “And because the voice was crap, we needed the screen as a crutch. But I’d like to start sorting out what things are really better on a screen and what things are better with sound.”
Getting answers to questions her kids ask about what is the tallest building? Definitely a voice. Pulling out her phone to type the question now feels “archaic,” Larko said.
“I think it’s going to be really fun for designers because they can finally pick and choose which form factor is best for which use cases,” he said.
