A scary SaaS selloff modifications the calculus for startups and personal markets: “code alone was never a real moat”

It all started a little over a week ago. Everything in the public and private markets for 2026 seemed as normal as can be. We were all talking about the bizarre, AI-old social network that is Moltbook. And then, advancements in enterprise AI agents like Claude dropped and it all still seems pretty normal (after all, the models get updated and improved all the time). 

But public market investors started to take this in, questioning the assumptions on which the sprawling software-as-a-service (SaaS) industry is built. There have been all sorts of concerns for a while, including shenanigans around using metrics from SaaS to apply to AI-native companies (that logic is specious at best). 

Then, a relentless selloff materialized: As of market close yesterday, over the last five days, Salesforce is down more than 3%; Adobe is down 3%; Docusign is down 5.5%; and Workday is down more than 10%. (These numbers include some recovery from the lowest lows.) These companies are among the hardest hit in what has now been termed “SaaSpocalypse.” And if you’re wondering how this applies to startups and private markets, the answer is simple. It names an open secret: That after a year of whispered chatter, the industry still has no real playbook for making money in enterprise AI. And that the certainties of the SaaS era have vanished like Jason (seems to) at the end of the first Friday the 13th movie. 

“The software slump is proving that code alone was never a real moat,” said Zach Lloyd, CEO and founder of AI agent startup Warp, via email. “For VCs and founders, this changes everything: you can’t bet on execution anymore when the cost of building software is going to zero. The question is now ‘what’s stopping someone from copying this next week,’ and if your only answer is ‘we have good engineers,’ you’re in trouble.” 

This all is likely a little overblown, but the essential question remains, said Dell Technologies Capital’s Daniel Docter. 

“The highs are never as high as they really are, and the lows are never as low as they are,” Docter told Fortune. “I think this is probably overdone a little bit in terms of this near-term reaction. But the longer-term question—the most important question—is, will AI displace a significant portion of SaaS software or SaaS revenue?

That’s easily hundreds of billions, or even trillions in value, up in the air. And what’s scarier than uncertainty?

We’re off for the long weekend! See you Tuesday,

Allie Garfinkle
X: @agarfinks
Email: [email protected]
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VENTURE CAPITAL

– Anthropic, a San Francisco-based AI company and developer of the Claude AI assistant, raised $30 billion in Series G funding from GIC, Coatue, D. E. Shaw Ventures, Dragoneer, Founders Fund, ICONIQ, MGX, and others.

– Talkiatry, a New York City-based psychiatrist employer, raised $210 million in Series D funding. Perceptive Advisors led the round and was joined by Sofina and existing investors.

– Simile, a Palo Alto, Calif. and New York City-based developer of an AI model designed to predict human behavior, raised $100 million in funding. Index Ventures led the round and was joined by Bain Capital Ventures and others.

– Anterior, a New York City-based AI platform designed for health plans, raised $40 million in funding from NEA, Sequoia Capital, FPV, and Kinnevik.

– Ever, a San Francisco-based electric vehicle retailer, raised $31 million in Series A funding. Eclipse led the round and was joined by Lifeline Ventures, Ibex Investors, and others. 

– Uptiq, a McKinney, Texas-based developer of an AI platform designed for financial services, raised $25 million in Series B funding. Curql led the round and was joined by Silverton Partners, 645 Ventures, Broadridge, Green Visor Capital, and others.

– OPAQUE, a San Francisco-based platform designed to make sure that AI systems are private and compliant, raised $24 million in Series B funding. Walden Catalyst led the round and was joined by others.

– Somethings, a New York City-based digital mental health platform designed for teens and young adults, raised $19.2 million in funding. Catalio Capital led the round and was joined by General Catalyst and Tusk Venture Partners.

– Electric Twin, a London, U.K.-based AI platform designed to build synthetic audiences that model human behavior, raised $14 million across two funding rounds from Atomico, LocalGlobe, Mercuri, Samos Investments, and others.

– Stanhope AI, a London, U.K.-based developer of AI models designed to allow machines to mimic the human brain, raised $8 million in seed funding. Frontline Ventures led the round and was joined by Paladin Capital Group and Auxxo Family Catalyst Fund.

– Santé, a New York City-based fintech platform for the wine and spirits industry, raised $7.6 million in funding. Bonfire Ventures led the round and was joined by Operator Collective, Y Combinator, and Veridical Ventures.

– Bearing, an Indianapolis, Ind.-based physical security operations platform built on ServiceNow, raised $4.5 million in seed funding. AZ-VC led the round and was joined by High Alpha, PHX Ventures, and Lightbank.

– Ando, a San Francisco-based developer of AI staffing and scheduling software for hourly workers, raised $4 million in seed funding. Slow Ventures led the round and was joined by Blitzscaling Ventures, Zero Capital, Monochrome, and others.

– Demoboost, a Warsaw, Poland-based product demonstration platform designed for software companies, raised €2.8 million ($3.3 million) in funding. Digital Ocean Ventures and RIO ASI led the round and were joined by B-Value.

PRIVATE EQUITY

– Nuveen agreed to acquire Schroders, a London, U.K.-based investment manager, for approximately £9.9 billion ($13.5 billion). 

EXITS

– Blackstone and EQT agreed to acquire Urbaser, a Madrid, Spain-based waste management company, from Platinum Equity for approximately $6.6 billion. 

IPOs

– ARKO Petroleum, a Richmond, Va.-based energy distributor, raised $200 million in an offering of 11.1 million shares priced at $18 on the Nasdaq.

FUNDS + FUNDS OF FUNDS

– Union Capital Associates, a Greenwich, Conn.-based private equity firm, raised $450 million for its fourth fund focused on founder-led businesses.