Hey folks, welcome to February’s newsletter, where we track what matters in late-stage venture. The market isn't rising, it's splitting. February's rounds made that cleaner: tier-1 capital went to hard infrastructure and AI with real moats, while everything else competed on fundamentals and hope.

Starting in December 2025 and continuing into early 2026, I began to notice how deeply the market had slipped into what I’d call “prediction mode” – a state where almost everyone felt compelled to publicly articulate their version of the future, even when that future was still highly uncertain.

The annual recurring revenue (ARR) numbers for AI coding tools look like a rocket ship. Cursor hit $500 million ARR, and Lovable went from $17 million in February to $75 million by July. On paper, this looks like unstoppable momentum.

Curious whether VCs fail at providing value? This data comes from the 2025 State of European Tech report by Atomico. Atomico regularly asks founders what value investors provide to startups.