25 Predictions for 2025

In 2024, the more things changed, the more they stayed the same. 

At a macro level, the year was defined by conversations about antitrust regulation, lowering Fed rates, and the US presidential election. At M13, we kept our obsession with tailwinds and hype cycles—and observed the “gradually then suddenly” nature of touchstone tech innovations. 

Below, M13 partners share the industry trends, investment areas, and pendulum swings we’re paying close attention to in 2025. Highlights include: 

Read on for more predictions and in-depth insights into the year ahead. 

AI impacts 

The year of agents
‍‍Anna Barber, Partner

2025 will be the year of AI agents, as agents evolve from experiments to mainstream tools across both consumer and enterprise. For consumers, the launch of OpenAI's Operator will usher in a range of personal AI assistants handling everything from travel and shopping to finance and home management. For enterprise, AI will take center stage in automating both workflows and complex decision making.

The new $50B consumer giant
‍Latif Peracha, Partner

Consumer software is primed for its next big thing. In 2025, AI personalization at scale will help drive the emergence of the next $50B+ consumer giant. It may start in gaming, it may start in chat, or it may start in therapy. It will start on the fringe and it will be polarizing but over time will become widely adopted.

Art meets science for consumer data 
‍Lizzie Francis, Partner & Head of Propulsion 

The qualitative data revolution is merging art and science to redefine consumer and market research. Historically, consumer insights often lacked depth and required large data sets to yield actionable results. Advanced AI models are transforming this landscape by mastering the art of interpreting unstructured data—like customer feedback, social media conversations, and product reviews—while applying the science of real-time analysis. These models can extract meaningful insights even from smaller data sets, democratizing access to sophisticated research tools. This shift opens the aperture for new and emerging businesses to harness powerful, nuanced consumer insights without the need for enterprise-scale resources. Even a singular insight can be a powerful opportunity for brands and, ultimately, meet consumer needs.

Legal tech’s time to shine
‍Win Chevapravatdumrong, Partner & Head of Legal 

While the legal industry has traditionally been slow to adopt technology, in-house lawyers—under constant pressure to do more with less, and who live in a world of unstructured data particularly suitable for AI-driven solutions—will embrace AI more quickly than their operational counterparts across organizations. 2025 will be the year AI technologies move beyond hype and are meaningfully integrated into day-to-day operations, fundamentally reshaping how in-house teams are structured and deliver value.

Bringing efficiency benefits to the masses 
‍Rob Smith, Partner

AI (and agents in particular) has made businesses more efficient, and less human hours can now be spent to achieve the same business results. In 2025, this will begin to yield significant net new benefits for the general public. This can take multiple forms, including: reduced prices as AI curbs the cost of doing business; increased PTO and benefits due to newfound efficiencies; and large scale educational programs to retrain employees and give new valuable skills to large portions of the workforce.

The Series B dog fight
‍Karl Alomar, Partner 

2024 was all about how LLMs can feed into an application layer that services the enterprise and SMB marketplace. This has resulted in numerous competing companies being funded across a wide range of applications. 2025 will see a dog fight within these categories to find the winners that can progress to the Series B stage, resulting in a higher bar for performance. Meanwhile, earlier-stage investments will likely move towards consumer-focused applications, as the market still tries to innovate on how to bring AI directly to the consumer.

“Good enough” isn’t good enough anymore
‍Matt Hoffman, Partner & Head of People 

AI is not going to take away your job…yet. But it will change the nature of your job. In the new AI era, the old definition of “being good at your job” will no longer be enough, as rote technical skills get automated away. Instead, an ability to creatively prompt AI tools, out-of-the-box problem solving, and novel thinking will be more important than ever. 

The golden age of vertical AI
‍Anna Barber, Partner

AI has unlocked so much value creation that AI platforms for smaller markets are now big. AI workflows for everything from solo attorneys to auto mechanics will usher in a new age of profitability for solopreneurs, as well as opportunities for investors.

The new media 

AI supercharges video advertising 
‍Carter Reum, Partner & Co-founder

In 2025, generative AI for video will be good enough to hugely change how brands advertise. Increased localization and hyper-personalization capabilities will lead to new ways to market to consumers. We’ll also see the beginning of the rise of programmatic advertising leveraging technology and AI in the creator economy. 

Social overtakes search 
‍Brent Murri, Partner

To date, AI has mostly affected marketers in the way they target consumers and measure efficacy. But in 2025, the major ad platforms themselves will feel the shifts caused by AI. Social media platforms will emerge as the largest category of digital media spend, taking the top position from paid search as more users flock to social platforms for discovery. Google will cede market share in the short-term, but don't count the internet giant out—with vast amounts of user data, it is well positioned to capture market share in the new AI world. 

Cultural dominance of the creator economy 
‍Courtney Reum, Partner & Co-founder 

Media adoption of AI will reflect a growing divide between legacy and emerging players. Traditional media, hampered by union restrictions and IP concerns, will focus on operational efficiencies such as using AI for production workflows, rights management, and data analytics. Meanwhile, creators and emerging players will use AI to generate entirely new forms of content, leading to a handful of viral moments that shake the industry. Audiences will continue shifting toward emerging media platforms, further cementing the creator economy’s dominance in shaping cultural trends—and engagement will be the new metric of influence.

News from group chat 
‍Christine Choi, Partner & Head of Brand Communications 

Once upon a time, the news was broadcast by a handful of sources through a handful of devices: the television, radio, computer. Today, Americans check their phones 140+ times a day. We’re increasingly doing business on our phones: one of M13’s first Latin American investments is for a startup that lets businesses do business with AI agents on WhatsApp. Trust in institutions is down, consumption of news is down, our attention span is down, and our phones are enabling an intimate and trusted news channel: group texts. For the distracted class in a fragmented media longtail increasingly cluttered by AI generated content, the text SMS will become a powerful and private tool of persuasion that can’t be fact checked, measured, or judged.

Crypto’s next act

Expansion continues, AI & crypto converge 
‍Latif Peracha, Partner

Crypto's expansion will continue, driven by bottom-up innovation and top-down regulatory clarity and government support. This newfound tailwind will drive significant innovation as entrepreneurs can build more freely in the US. Blockchain-based applications for the physical world (DePIN) will reach scale in areas such as telecom (Helium), mapping (M13 portfolio company Hivemapper), and energy (M13 portfolio company Daylight). We will see breakthrough use cases at the convergence of crypto and AI, as well as agent-to-agent transfer of stablecoins via their own wallets, globally and without intermediaries. Crypto is here to stay, but it is still early days.

A crypto bull market 
‍Karl Alomar, Partner 

The incoming administration has clearly signaled a positive attitude toward crypto. This will require clear guidance on regulations and processes by which companies can comply; however, it should also result in a bull market around the category that in turn continues to drive innovation. I expect innovation here will likely focus on tokenization and payment mechanisms (areas in which we have great interest as investors).

Crypto wallets go mainstream (again)
‍Carter Reum, Partner & Co-founder

Solana will close the gap on Ethereum, becoming the second biggest blockchain in the world after Bitcoin. Meanwhile the launch of AI-generated memecoins, driven by community, will unlock an unprecedented number of consumer wallets. 

Economic & regulatory environment 

The exit bottleneck is over
‍John Tabis, Partner & Head of Launchpad

With multiple rate cuts in the rearview by the end of Q1, the IPO and M&A bottleneck will finally release. This will bring liquidity opportunities to the private markets again, potentially providing record returns (excluding the Covid fever dream highs) to LPs, GPs, and founders 

Non-traditional M&A cements Big Tech’s AI dominance 
‍Win Chevapravatdumrong, Partner & Head of Legal 

Non-traditional M&A structures—licensing agreements, strategic partnerships, founder hires, etc.—will continue to dominate AI dealmaking, even as antitrust scrutiny eases under a Trump administration. Recent examples, such as Microsoft/Inflection, Google/Character.ai, and Amazon/Anthropic, reflect Big Tech’s preference for speed, flexibility, and reduced integration risks in securing transformative technology and talent. They also show well-capitalized incumbents are using flexible deal structures to dominate AI infrastructure and innovation.

DPI reigns supreme 
‍Sarah Tomolonius, Partner & Head of Investor Relations 

In 2025, there will be continued inroads into retail investors increasing their exposure to private assets, including private equity and venture. But, access to the best managers will continue to be determinative of how successful this is. Investors in long-dated asset classes may continue to demand—and be shown—that these long-duration but discrete fund life assets do require a return of capital at some point. DPI should continue to be, if not the most important metric gauging successful asset management, at least neck-and-neck with TVPI. 

Exits feed the venture ecosystem
‍Karl Alomar, Partner 

With the Fed continuing to moderate interest rates as inflation continues to move towards the 2% target rate, more activity should be driven into the public markets—driving more interest in IPOs and an opportunity for the pent-up demand to leave the waiting room and be realized. Moreover, the new administration’s perspective on the FTC may curb M&A scrutiny, allowing for larger acquirers to slowly reenter the market and look to aggregate smaller technology companies looking for a new home. If this happens, investor capital will get recycled, driving greater fuel for the venture community and providing a great opportunity for renewed innovation in an AI world.

DOGE reshaping govtech 
‍Brent Murri, Partner

The formation of DOGE will be a boon for new govtech funding and growth. The playing field will be leveled due to a more transparent and efficient procurement process for new technology vendors. Governments will also look to modernize their operations with the aid of technology. Companies that sell to government buyers—like M13 portfolio companies Polimorphic and Prepared—will be the beneficiaries.

The human element 

The new people management 
‍Matt Hoffman, Partner & Head of People 

AI is changing the composition of the workforce. This new era will still require smart junior staff to manage AI tools and execute processes, and creative senior leaders to set the high-level strategy will be even more important—but these changes will cut out much of the need for middle managers. The result of this will be flatter organizations and new management needs. With that, the operational aspects of management will begin to go away as leaders take on more direct reports, and the role of coaching and human connection will become more important than ever. Finding opportunities to support mindfulness in work will be more critical as well, as we look to disconnect from technology, make space to focus, and get better at the things that tech can’t help us do.

IRL > digital 
‍Christine Choi, Partner & Head of Brand Communications 

Loneliness is a modern digital problem, and in 2025, well-curated, hyper-local, intimate gatherings will be more valued than ever. Measurability doesn’t make something worthy, and I believe in the power of the human experience that can’t be measured. These “unmeasurables” are learning pathways that shape business decisions, unlock unimaginable partnerships, and reactivate our human capacity.   

AI-powered personal reflection? 
‍Lizzie Francis, Partner & Head of Propulsion 

AI-powered tools create the ability to analyze qualitative—and contemplative!—data and will transform how we navigate personal decisions and aspirations. From interpreting personal notes and entries to synthesizing conversations and life patterns, advanced AI tools will provide individuals with dynamic, context-rich guidance. Paradoxically, the speed and efficiency of AI-generated insights will—I hope—encourage people to slow down, reflect, and approach their decisions with greater intentionality.

Honorable mentions

Innovation meets climate 
‍Sarah Tomolonius, Partner & Head of Investor Relations

I still believe climate change considerations for companies—both new and incumbent—will inform investing opportunities, impacting where people live and work (or can no longer live and work). As conversations about AI’s power costs, climate impact, and the computing capacity required to train LLMs grow, I expect we'll also see more innovation around energy efficiency here. 

A new Google identity? 
‍Latif Peracha, Partner

In 2025, Google will be known as a self-driving car company, as Waymo becomes one of the most important companies in the world and increasingly prevalent across US cities.