Winter Newsletter
Recapping a frigid (and frenetic) season in VC.
In the world of investing, the pendulum of bull and bear rarely pauses at a perfect equilibrium. It spends most of its time swinging between irrational exuberance and overwrought despair. Lately, the narrative surrounding enterprise software has swung toward the latter. If you read the headlines or track the public indices, you might believe that the SaaS model — the very engine of venture returns for going on two decades — is being hollowed out by LLMs. Even those who don’t subscribe to the more ominous whisperings of “SaaSpocalypse” can’t help but wonder where the software landscape is headed. What does defensibility mean in the age of AI? Which growth metrics still matter, and which do not?
Amid such epochal uncertainty, we find ourselves in a position of cautious optimism. As seasoned investors, we recognize that the most significant opportunities often emerge precisely when the consensus is most discouraged. While the generic SaaS bathwater is indeed swirling the drain, the “baby” — proprietary, verticalized intelligence — has a whole life ahead of it. The market’s current exhaustion is a byproduct of the realization that the old moats of simple systems of record or elegant workflow wrappers have evaporated. These were companies built on the horsepower of capital and headcount, assets that are easily disrupted by the autonomous execution of AI-native alternatives. To survive the swing, one must move past software that humans merely tolerate as a digitized form of tedium; we must embrace software that feels magical in its osmosis of human intuition.
This moment favors a specific kind of founder, and not necessarily the one the popular imagination conjures. The next generation of durable AI companies will not be built by generalists racing to bolt AI onto existing workflows, but by domain specialists with singular insights and hard-won expertise in regulated, relationship-driven industries that have historically resisted new entrants. We are doubling down on founders who possess that context, those key relationships, and the kind of industry-specific data that cannot be scraped from the open web or simulated by a foundational model. This is the difference between a tool that is merely useful and one that is mission-critical. In a volatile market, the former is a line item to be cut; the latter is a platform that owns the industry’s data exhaust and, by extension, its future.
Our conviction remains rooted in this verticality. As the underlying models become commoditized, durable moats will consist of: (a) proprietary data gathered in the trenches of niche industries, (b) relationships, distribution, and GTM execution, and (c) value creation in the agentic layer. The macro environment reinforces a sense of urgency. February 2026 was the largest single month for global venture capital in history, and while the headline capital may be flowing to foundational model builders, much of the potential for asymmetric upside belongs to the vertical layer on top.
By backing founders who deeply understand the most intricate business logic of their verticals (with all their edge cases and veiled frictions), we aren’t just investing in software; we are investing in the indispensable gravity that unique, non-replicable data, insights, and partnerships exert on a market.
Firm Updates & New Investments
In that spirit, we are thrilled to share that ASV has made four new investments in as many months, three at the seed stage and one at Series A. We look forward to announcing these exciting new portfolio companies in short order.
Last week, the team ventured down to Miami for our March offsite, coming away with new connections and some much-needed Vitamin D. Akerman LLP and Supernode Ventures graciously hosted us at their VC Deals Breakfast in Brickell, and between strategy sessions, pipeline reviews, and an internal Claude Code hackathon, we squeezed in some sea kayaking in Biscayne Bay.
In other news, Jin Kwon made his writerly debut for Armory’s Substack with a piece on the importance of building software with a hospitality mindset. Anthony Santaro delivered a guest lecture on Entrepreneurial Finance at Binghamton University. And Somak Chattopadhyay served as a featured speaker at the 2026 Upstate Capital Impact Exchange.
Company Updates
BQP founder/CEO Abhishek Chopra appeared on the Coffee with a Founder podcast to discuss how quantum-inspired algorithms are helping companies achieve “quantum readiness” ahead of the next revolution in computing.
At the annual Wavefront Congress in Miami, Clerio presented new findings (and groundbreaking performance data) as part of its quest to topple myopia.
Motive hit the road for an appearance at the National Automotive Dealers Association (NADA), raising eyebrows with an impressive booth showcasing the company’s exciting new features.
Qumis closed out a $4.3M seed round, further bolstering its legal-grade coverage intelligence platform.
Jobs
Compyl is looking to fill several sales, marketing, and engineering openings while actively seeking a Head of Product.
Heretto is hiring a Head of Marketing, a Senior Customer Success Manager, and a Customer Issues Developer.
Motive is hiring an Account Executive based in Oklahoma City.
Thoughtly is hiring a Founding Sales Development Representative to work out of their New York City office.
Qumis is hiring for a number of roles spanning sales, marketing, engineering, and customer experience.
About ASV
Armory Square Ventures (ASV) is a venture capital firm based in the Finger Lakes region of New York State, with offices in NYC and Indianapolis. The firm was an early investor in ACV Auctions (NASDAQ:ACVA), Bentobox (acquired by Fiserv), and numerous other high-growth B2B Software companies.
We lead seed and early-stage rounds in B2B SaaS, marketplace, and vertical AI companies and play an active role recruiting talent, customers, and follow-on capital to help our companies scale.
We like to say we are an optimism engine for secondary cities and a community catalyst for regions outside Silicon Valley. As a firm, we are also enriched and nourished by individuals from a range of backgrounds, who are all passionate about uplifting and inspiring growth in cities across the Northeast and Midwest.
• Stage: Seed & Series A
• Location: Management based in New York State and/or other emerging cities across the US
• Check Size: $500k - $3M in the first round with plenty of reserves for follow-on capital
• Business Profile & Model: Software, mobile, or technology-enabled services (emphasis on B2B) with repeatable, recurring, or transaction-based revenue models
• Market: Addressable markets of at least $1B+
• Team: Full-time technical/product leader and sales/marketing leader
• Traction & Unit Economics: Prototype of product deployed with a small sample size of customers; capital efficient
We’re hard at work scouting new investments. If you or someone you know has startup questions, reach out to either Anthony or Jin (emails below). We are actively investing out of our third fund and look forward to sharing more on it as it continues to take shape.
Best wishes in the meantime.
The Armory Square Ventures Team
Get in Touch
Have an opportunity to discuss or want to talk startups?
Anthony Santaro - anthony@armorysv.com
Jin Kwon - jin@armorysv.com