Future-Focused
Insights from Deciens on navigating 2025 and beyond
As we move forward into 2025, each partner at Deciens offers a unique lens on the challenges and opportunities that lie ahead. From AI’s enduring dominance to the complexities of private markets, the evolving venture landscape calls for resilience, adaptability, and disciplined execution.
In this post, our partners share their outlook on what 2025 may hold for the broader venture ecosystem, our portfolio companies, and Deciens itself.
Ishan Sachdev
General Partner
2025 is shaping up to be a year of significant uncertainty and potential volatility. The venture landscape remains dominated by AI, both in mindshare and in fundraising activity. That shows no signs of abating, as hyperscalers continue to drive AI spending, the stock markets reward players in the space, and private company fundraising breaks records. However, at the same time, there is a growing awareness that this entire dynamic is levered highly to the spend of the hyperscalers. Any tapering could cause significant ripple effects down the line, across public and private markets.
The macroeconomic outlook is similarly uncertain. The global events from 2024 are largely continuing into 2025, with new political and economic tensions in Canada, France, Brazil, and other nations. In the U.S., the key leaders of the incoming administration are being appointed, but the policies that will result are still in significant flux as there are large divides between the different factions of the incoming President’s supporters and appointees. These internal divides make it difficult to predict the impact on various industries, though substantial shifts could occur from the policy directions that are being discussed.
For the venture capital and startup ecosystem, this uncertainty underscores the need for adaptability. Companies must prepare for significant volatility and shifts in the markets they operate in, the markets their customers operate in, the capital markets, and the regulatory landscape. Change is going to be the new normal.
Building an “all-weather” company that can withstand the various directions the wind might blow will be essential, versus optimizing for the highest growth and valuations possible. In bull markets, when capital is abundant and milestones are clear, companies can pursue the latter approach, but when seas are choppy, a different approach is necessary.
After a challenging couple of years, the fintech sector is entering 2025 with strong tailwinds, supported by several positive indicators:
Strong public company performance: The FactSet Global Fintech Index outperformed the Nasdaq and the S&P 500 over the past quarter.
Increasing M&A activity: Major deals include the $3.2B acquisition of Preqin by BlackRock, the $1B acquisition of MoneyLion by Gen, the $1B acquisition of Bridge by Stripe, and the $460M acquisition of Brigit by Upbound Group.
A robust IPO pipeline: Companies like Chime, Klarna, and Circle have filed for IPOs, signaling confidence in the market.
Fintech never went away, but companies have felt as if they were fighting an uphill struggle as hot capital moved on to AI, the bar for fundraising went up significantly, and many questioned whether the space was, in fact, an exciting place to build big tech companies. The sector’s recent successes highlight its resilience and the emergence of durable businesses, despite market vicissitudes.
As the market also comes to this realization, we anticipate 2025 will bring renewed interest in the sector. The challenges and opportunities for innovation in financial services remain abundant – from addressing the crises in housing affordability, real estate-related insurance, and the needs of an aging population, to unlocking the transformative potential of AI, for which we have only scratched the surface.
Vishal Rana
Partner, Portfolio & Operations
Our portfolio founders have a bright year ahead. Many have made hard decisions in 2024 to reorient their products or go-to-market strategies, and they are starting to see those bets pay off. For our Fund 1 and Fund 2 companies, we remain focused on guiding them toward self-sustainability, where additional capital serves as an accelerant rather than a lifeline. The fundraising market for non-AI-focused companies will continue to be challenging, rewarding strong unit economics over growth-at-all-costs strategies.
There are a number of trends that we expect to accelerate in 2025, and we’re excited about their impact on our portfolio companies and our new Fund 3 companies. Energy markets will become ever more volatile as climate and renewables continue to impact aging infrastructure – hence our new investment in Generous Energy (algorithmic energy trading), and our continued investment in GlacierGrid (energy savings and management).
Current and short-term advances in machine learning and generative AI make previously untenable business models viable. Our Fund 3 investment in Grupago (micro-finance at scale), joins earlier investments like SimplyWise (micro-apps at scale) and beatBread (music financing using data instead of taste). As these technologies become more powerful, these investments will compound their advantages.
Private markets will continue to be an important but challenging space. The number of new fund emerging managers has fallen precipitously in the past few years, with capital increasingly concentrated in fewer funds. This environment underscores the need for new and better partners. Reflecting this, we made a Fund 3 investment in Parachute Investment Co (liquidity management for GPs) and continued to support Fund 2’s Sydecar (software admin for SPV and funds) by leading their Series A. Sydecar is seeing tremendous growth as future GPs stick to SPVs rather than face the brutal fundraising environment emerging managers are facing right now.
All in all, we are excited for the year ahead. Our company operations are more efficient than ever, and most of our portfolio companies have warded off existential financing risk for the foreseeable future by either driving burn down to historically low levels, or already generating cash at these early stages of their life. The last few stormy years in financing markets were no match for our all-weather portfolio.
Dan Kimerling
Managing Partner
John Kenneth Galbraith’s short book, A Brief History of Financial Euphoria, is a perennial favorite of mine. Every year, I make a point to re-read it. And every year, seemingly without fail, I am reminded that the human capacity for speculative excess appears to know no bounds. This is not a new revelation, but as I look back at 2024, my awareness of this phenomenon returns to the fore. Incentives, even ones that are self-destructive, rule the world. Or, as the late and great Charlie Munger put it: “Show me the incentives, and I'll show you the outcome.”
What has driven us at Deciens over the past eight years is clear: well-defined goals, a deep conviction in our strategy, tremendous flexibility in tactics, and a relentless focus on executional discipline. The last of these – executional discipline – is poorly understood but vitally important. As Yogi Berra famously quipped, “Making predictions is hard, especially about the future.” No one knows what the future holds. Sometimes we get lucky; other times, not so much. This uncertainty means we cannot rely solely on outcomes, likely a decade or more from now, to assess how skillful we are (or aren’t) today. Instead, all we can do is build, test, and iterate a set of processes that we believe are the best of the best, and have the courage and foresight to stick with those processes through thick and thin.
As I look ahead to what I think will make Deciens successful in 2025, it is the same thing that has made us successful every year since 2017: a ruthless focus on process and process hygiene. A year from now, if we can look back at 2025 and say that we stuck to our knitting, then whatever the outcome may be, I know we will have had a successful year. Conversely, if we stray too far, it will have been disappointing no matter the outcome.
Charting the Path Forward
2025 holds the promise of transformation, not just for the companies we support but for the broader venture ecosystem. While uncertainty will challenge the status quo, it also opens the door for bold innovation, creative problem-solving, and enduring growth – our specialty.
At Deciens, we’re not just observing these shifts – we’re actively shaping and adapting to them alongside our portfolio companies. The strength of our partnerships, the foresight of our founders, and our commitment to process-driven excellence position us to thrive in the face of whatever this year brings. Here’s to a dynamic and impactful 2025.
