AI Investment Surges As Investors Prioritize Efficiency And Early Market Entry, Says INSART CEO

Artificial intelligence investments now constitute a sizable portion of total U.S. venture capital funding, however, efficient operations and clear sales pipeline are becoming the main drivers of this surge.

The transformative potential of AI

Vasyl Soloshchuk, CEO of INSART, attributes this rapid growth to the fear of missing out on AI's transformative potential, alongside its role in optimizing business operations.

"AI startups captured 46.4% of the total $209 billion raised last year, up from less than 10% a decade ago," Soloshchuk told Benzinga in an interview on Wednesday at the ETH Denver conference. "Investors want to get in early, but real traction and operational efficiency are what ultimately drive funding decisions."

The influx of capital into AI has been significantly shaped by major technology firms investing billions to expand infrastructure.

Companies like Microsoft MSFT and Google GOOGL have built AI ecosystems that startups leverage for practical applications.

"When tech giants invest at this scale, they create AI infrastructures like OpenAI, which fintech startups then use to develop real-world use cases," Soloshchuk explained.

"For instance, Complify integrates OpenAI to streamline compliance case management, making the process faster and more efficient."

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Where AI investments go to

While AI is the dominant investment focus, Soloshchuk cautions against viewing it as a one-size-fits-all solution. "There's a lot of AI hype, but venture capitalists don't just fund chatbots," he noted. "Fraud detection, credit scoring, underwriting automation—these are the kinds of AI applications that attract serious investor attention."

He emphasized that securing funding isn't just about branding a startup as AI-driven, but rather demonstrating a viable sales pipeline and market demand.

For non-AI startups looking to attract funding, Soloshchuk suggests focusing on strong market traction and clear revenue models.

"Having a validated business model—whether it's $200K in annual recurring revenue or signed letters of intent—still holds weight with investors," he said. "It's also crucial to find the right partners in software development and demand generation to strengthen positioning."

Despite AI's dominance, fintech remains a highly attractive sector for venture capital.

"B2B fintech continues to draw investment, especially from founders with deep industry experience who can create real, scalable solutions," Soloshchuk said.

He highlighted successful fintech startups in the INSART accelerator, including Analytic Marketing, which leverages AI-driven analytics to improve customer engagement, and Couplr AI, which enhances financial advisory services through behavioral finance insights.

As the investment landscape evolves, Soloshchuk believes that future funding decisions will be increasingly data-driven.

"Investors are looking for real paying clients and measurable traction," he stated. "Having a well-defined product-market fit, clear financial metrics, and early customer adoption will define the next wave of fundable startups."

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