Venture capital investment in enterprise technology has reached record levels in 2019, with total investment in B2B software companies on pace to significantly exceed prior years. The flow of venture capital into enterprise technology reflects a broad consensus among institutional investors that the digital transformation of business operations — long predicted and long delayed — is finally proceeding at scale, creating durable tailwinds for the software companies enabling that transformation.
Understanding where venture capital is flowing — and why — provides enterprise software founders with valuable context about the categories most likely to attract institutional investment, the investment theses that are driving capital allocation decisions, and the competitive dynamics they will face as they build their businesses. From our vantage point as a new seed-stage firm focused on enterprise software, here is our perspective on the key investment trends shaping the market in 2019.
The Continued Dominance of Cloud Infrastructure
Cloud infrastructure and platform services remain the largest and most consistently funded category in enterprise technology investment. The three major cloud platforms — Amazon Web Services, Microsoft Azure, and Google Cloud Platform — continue to grow at rates that are remarkable for businesses of their scale, with each growing annual revenue by 40% or more year-over-year. This underlying infrastructure growth is driving investment in the vast ecosystem of tools, platforms, and services that operate on top of these cloud providers.
Investment in cloud management and optimization tools has been particularly active. As enterprises have accumulated significant cloud spending — often across multiple cloud providers simultaneously — the problem of understanding, attributing, and optimizing that spending has become a genuine enterprise priority. Companies in the cloud cost management category have attracted significant venture investment by offering enterprises real visibility into their cloud spending and tools for rightsizing resources and eliminating waste.
Multi-cloud management — the ability to deploy, monitor, and manage workloads across multiple cloud providers from a single control plane — is another actively funded category. Enterprises increasingly want the flexibility to use the best service from each cloud provider for specific workloads, avoid lock-in with any single provider, and negotiate better pricing through competition. The tooling to manage this complexity effectively is genuinely nascent, and several companies are competing to define the category.
Enterprise AI and Machine Learning Infrastructure
Investment in enterprise AI and machine learning is expanding rapidly, driven by the increasing commercial viability of machine learning models and the growing demand from enterprises who want to deploy AI-driven capabilities without building the underlying infrastructure from scratch. The category spans a wide range of investment activity, from MLOps platforms that help data science teams deploy and manage models in production, to labeling and annotation services that generate the training data that models need, to feature stores that enable reuse of ML features across multiple models and teams.
MLOps — the practice of applying DevOps principles to machine learning development and deployment — has emerged as one of the most actively funded subcategories within enterprise AI infrastructure. The challenges of deploying machine learning models in production — tracking experiments, versioning models, monitoring for performance degradation, automating retraining pipelines — are significantly different from the challenges of deploying traditional software, and the tooling to address these challenges is still relatively immature. Companies building in this space are attracting seed and early-stage investment from a wide range of institutional investors who believe MLOps tooling will be mandatory infrastructure for enterprises as they scale their AI deployments.
Conversational AI and natural language processing applications are also attracting significant investment, with enterprise buyers particularly interested in tools that can automate customer service interactions, extract structured data from unstructured documents, and enable natural language interfaces for business intelligence and analytics. The improvement in underlying NLP model capabilities — driven by the publication of transformer-based architectures like BERT — has dramatically expanded what is possible in conversational AI, and enterprises are eager to capture those capabilities.
Fintech Infrastructure and Banking Software
Financial technology — particularly the infrastructure layer of fintech — continues to attract enormous venture investment in 2019. The category encompasses a wide range of businesses: API platforms for payments and banking services (building on the success of Stripe and Plaid), lending infrastructure that enables fintech companies to originate and manage loans without building the underlying banking infrastructure, and compliance and risk management software that helps financial institutions navigate increasingly complex regulatory requirements.
The "banking as a service" model — where companies offer banking capabilities through APIs that fintech companies and non-financial enterprises can embed into their own products — is one of the most actively funded categories in enterprise fintech. The ability for a non-bank company to offer bank accounts, debit cards, and payment capabilities to its customers without obtaining a banking license is enabling an entirely new category of embedded finance products, and the infrastructure companies enabling that capability are attracting significant institutional interest.
Insurance technology — insuretech — is also experiencing significant investment activity, with particular attention to the infrastructure layer: companies building the APIs and platforms that enable traditional insurers to modernize their policy administration, claims management, and distribution systems. The legacy technology infrastructure of the insurance industry is notoriously outdated, and the insurance carriers that will compete effectively over the next decade are those that find ways to modernize their systems faster and less expensively than previously thought possible.
Healthtech and Healthcare IT
Healthcare IT is experiencing a renaissance of venture investment, driven by the combination of meaningful regulatory progress on healthcare data interoperability, the increasing availability of healthcare data through EHR systems, and the growing recognition that AI-driven clinical decision support tools can deliver measurably better patient outcomes. Investment in this category is particularly notable given the high barriers to entry — regulatory complexity, long sales cycles, and stringent security requirements — that have historically deterred some investors.
The healthcare data interoperability problem — the challenge of exchanging patient data reliably between different healthcare organizations and IT systems — is a particularly active area of investment. Regulatory mandates for healthcare data interoperability, combined with the development of FHIR (Fast Healthcare Interoperability Resources) as a standard API framework for healthcare data exchange, have created a market opportunity for companies building the infrastructure to make healthcare data flows reliable and secure. Companies building in this category are attracting investment from both healthcare-focused and generalist technology investors.
The Seed Stage Investment Landscape
At the seed stage, the investment landscape in enterprise technology is characterized by increasing capital availability and, in some categories, increasing competition for the best deals. The number of seed-stage funds focused on enterprise software has grown substantially over the past several years, reflecting both the returns generated by previous enterprise software seed investments and the growing body of evidence that the seed stage is where the most significant venture returns are generated in enterprise software.
The best seed-stage enterprise software deals — companies with genuine technical differentiation, experienced founding teams, and clear go-to-market paths in large, underserved markets — are competitive. Founders who understand the investment landscape and can articulate a compelling investment thesis are better positioned to attract the right institutional partners at the seed stage.
Altris Ventures' own thesis — focused on vertical SaaS, infrastructure software, and AI-native B2B applications — reflects our read of where the most durable enterprise software businesses will be built over the next decade. We believe these three categories offer the best combination of market size, structural tailwinds, and competitive dynamics for seed-stage companies, and we are actively meeting with founders building in these spaces.
Key Takeaways
- Venture capital investment in enterprise technology reached record levels in 2019, reflecting broad confidence in the continuing digital transformation of business operations.
- Cloud infrastructure management, cost optimization, and multi-cloud tooling are among the most actively funded categories as enterprise cloud spending scales.
- MLOps, conversational AI, and NLP applications are attracting significant investment as enterprise AI deployments expand beyond experimentation to production.
- Fintech infrastructure — payments APIs, banking-as-a-service, and insurance technology — represents one of the largest and most active enterprise investment categories.
- Healthcare IT is experiencing renewed investment momentum driven by interoperability regulations and AI-driven clinical decision support opportunities.
- The seed-stage enterprise software market has become more competitive, making the quality of the founding team and clarity of investment thesis more important differentiators.
Conclusion
The enterprise technology investment market in 2019 reflects a healthy, dynamic ecosystem in which capital is flowing toward genuine technology innovation rather than financial engineering. The categories attracting the most investment — cloud infrastructure, AI, fintech, and healthtech — share the common characteristic of addressing large, structurally underserved markets with software solutions that deliver measurable, quantifiable value. For founders building in these spaces, the availability of institutional capital has never been greater; the challenge is demonstrating the combination of technical excellence, market insight, and commercial execution that institutional investors require.
Altris Ventures is actively deploying capital across our target categories. Connect with our team if you are raising a seed round for an enterprise software company, or learn more about our investment thesis and focus areas.