Every year, we kick off with Juxtapositions—a compilation of our most discussed predictions for the year ahead, drawn by placing contrasting but relevant observations side by side. We have found the exercise of seeking, and then exploring, these juxtapositions to be extremely clarifying as part of our annual planning process: by identifying the tensions shaping our ecosystems and companies, we can make relevant decisions on what to work on, which technologies will break out, and how our companies might consider navigating the shifting landscape.
We usually share a version of these Juxtapositions at the start of the new year. But this January, as we were preparing our share out, we decided to hit pause, as our excitement level for putting out our thoughts during what was undeniably a whirlwind didn’t feel quite right. All of the macroeconomic, political, technology, and high-growth, market-specific indicators felt hard to read. Market sentiment was swinging wildly, AI hype was simultaneously hitting both new peaks and sudden troughs of fear, and the political environment pre-inauguration felt particularly uncertain.
So, we waited. Now, with a couple of months behind us (and having spent time as a partnership seeking a point of view on the world), we feel that better patterns are emerging, sentiment is solidifying, and a clearer picture is forming. In nearly every conversation we’ve had with investors and partners so far this year, we heard, “February is the new January.” We found this to be true. Between January and February’s recalibration and the escape velocity of Spring, we now find ourselves in a strategic window—less noise, more focus, and a sharper read on what’s next.
As we look ahead to 2025, we are attuned to the unique challenges of a funding environment that is thawing but still challenged, the evolving nature of AI software development and investment, and the continued need for innovation in healthcare access and delivery.
Many of the Juxtapositions we outlined in 2023 and 2024 played out—like the risks of capital-intensive strategies, the indispensability of strong leadership, and the rewards of resilience through volatility. This year, our guiding mantra remains disciplined offense. But unlike last year, the emphasis has shifted. Now, offense takes center stage.
The insights that follow emerge from this mindset—exploring the tensions and transformations shaping 2025 across our firm’s key focus areas. We hope they may spark new perspective, and help guide you toward what matters most to you from Spring and beyond.
On behalf of the entire Juxtapose team, with optimism and intentionality,
Founding Partners Jed Cairo and Patrick Chun
CAPITAL MARKETS
Juxtaposition #1
From a macro perspective, we’ve hit the bottom of the venture market pullback
AND
Fundraising for most venture-backed businesses will likely still be a challenge
The growing trend toward down rounds across Series A, B, C, and D fundraises that began in the second quarter of 2022 hit a peak in early 2024, and has since begun to float downward. And while we expect companies can look forward to a somewhat friendlier fundraising market in 2025, with the macro indicators showing the “bottom of the asymptote” having happened last year, the heightened sense of rigor required for companies to (1) operate and grow successfully, and (2) raise the capital they need to evolve, will remain – and we believe that’s for the best. We’ve observed a handful of key principles followed by companies that have successfully navigated the last year and set themselves up for a breakout 2025, including a focus on:
- Quality and Clarity of Unit Economics - Capital efficient growth and sustained profitability are requirements. As capital markets expand, focusing on appropriately sized rounds for a company’s current stage of growth will be essential.
- Capital Efficiency - Death spirals come from a confluence of (1) underperformance and (2) lack of capital. Companies should match burn to their level of confidence in their current performance, and save higher burn periods for when they are in a position to grow and have reliable access to capital. Companies that are taking advantage of technology that enables leaner, meaner ways of building and scaling will benefit in this environment.
- Creating Multiple Ways to Win - We see and live in a constant tension between focus and optionality. While focus is clearly paramount to win in competitive markets, companies also need to determine the right level of optionality they want to take on, namely ensuring they have multiple shots on goal to land escape velocity.
- Speed to Action - Be aggressive about what’s working, and be willing to confront what’s not working early and move to fix it as quickly as possible – before the problem compounds.
- Will to Win - Company building will feel hard, but in reality, it has always been hard - in some markets you were just fortunate (or unfortunate?) enough to not really realize that. As in most things that are hard, getting through is about wanting it badly enough and not giving up.
- Putting AI in your company’s name - When all else fails, .ai helps. Grab a URL quick - they are already getting expensive ;)
Juxtaposition #2
The market is demanding extreme capital efficiency in most subsectors of the innovation ecosystem
AND
Simultaneously exhibiting extreme optimism around certain highly capital-intensive endeavors
The last few years of market volatility made capital efficiency paramount for most companies and investors (as noted above). But in the midst of growing conservatism, we saw some industries and companies continue to barrel toward bigger and bigger rounds with higher and higher valuations. In sectors like healthcare, where innovation is often incremental, we’ll likely continue to see investors take a more measured approach to capital deployment and maintain high standards for capital efficiency.
On the flip side, in certain sectors like AI, we’re seeing a fluctuation between conservatism and an appetite for what now seems like the old-fashioned “mega round”, more akin to the go-go years of the late 1990s (and pre-COVID tech expansion times) when capital inefficiency was not just okay but was deeply rewarded. Macroeconomic shifts, coupled with the “winner takes all” potential of breakouts in newer industries are, in some cases, driving investors to make outsized bets.
As many venture capital firms are accepting smaller ownership stakes in companies, the requisite exit value required to deliver meaningful performance is skewing higher. We believe that in this market environment, investors with meaningful ownership will produce higher risk-adjusted returns as the ultimate outcomes needed are lower, while maintaining meaningful upside.
One thing is for certain - we have moved away from one-size-fits-all growth strategies and growth at any cost. For some, this reset has proven painful, requiring a hard look at their original paths and assumptions. And while some industries may continue to see high-flying valuations and fundraises, it’s the companies that can embrace a new model, operating at the intersection of efficiency and innovation potential, that will lead the way in 2025 and beyond.
BUSINESS MODELS
Juxtaposition #3
Much of PE-style consolidation today favors risk reduction over innovation to drive profit
AND
Certain industries will require M&A to build disruptive, hyper-growth winners
Modern PE-style consolidation tends to fall into three buckets: (1) basic consolidators focused on sourcing and transaction with little risk exposure, (2) minimally integrated consolidators who are similarly low-risk, but operate at a larger scale, and (3) platform integrators that focus on integrating assets around a single business system, taking on more risk but positioning themselves for longer-term growth.
For the third bucket to work and lead to truly durable franchises, the M&A muscle needs to sit within the integrated business itself, not the sponsor firm. While hiring the talent needed to run these strategies is usually more expensive in the short term, we believe that allowing operators to own M&A reliably leads to better returns. We’ve seen a good example of this play out in one of our portfolio companies, Zephyr. Zephyr is a tech-first home services platform led by an outsized team of operators, including CEO Shawn Weidmann, who formerly led Spring Education group as CEO and served as COO of Public Storage. With Shawn and team at the helm of Zephyr’s M&A strategy, Zephyr has successfully acquired 15 businesses within its first 2.5 years of operation. As Zephyr approaches nine-figures of revenue with best-in-class organic growth made possible by leveraging proprietary software and AI, it's clear that the company, or one like it, would not have the same kind of success with a purely organic model given the structural dynamics within the HVAC industry.
Over the next year, companies that make trade-offs for the best talent and focus on implementing growth-oriented, technology-based interventions in high-value markets will be able to break out and bring much-needed innovation to the long-outdated sectors they operate in - and quickly see the rewards.
HEALTHCARE
Juxtaposition # 4
Investors are shying away from “care delivery”
AND
The way patients access care is where innovation is still most sorely needed
“Care delivery” encompasses a wide range of services and systems designed to provide healthcare to patients, including hospitals, outpatient clinics, telehealth platforms, and home care services. The COVID-19 pandemic brought many of these systems to the forefront, highlighting both their importance and shortcomings. Despite the increased visibility, fragmentation and inefficiency remain huge challenges within the current system and lead to poorer health outcomes for patients. That said, this also presents a meaningful opportunity for companies that address healthcare access and patient experience to make a huge impact. Expectations around personalized care, the desire for more efficient solutions from payors and employers, and policy shifts aimed at improving access to care are creating space for innovation.
At Juxtapose, we largely benefit from “complexity arbitrage”, where our team and network’s experience and relationships in markets with significant regulatory complexity provide an asymmetric advantage, one that allows us to leverage our creation starting point to both out-operate but also capture creation upside. We believe companies that are able to develop meaningful capital followership alongside effective solutions in markets where it traditionally takes a long time to demonstrate ROI will be massive winners in both the medium- and long-term. In particular, opportunities where we can build in an environment with extreme and unhealthy supply-demand imbalance, where we can use business development to de-risk either the supply or demand side of the equation, and/or can create operational models with sufficient elasticity continue to screen as a highly attractive place to generate venture returns (with the potential of de-risked downside).
The need for a more accessible, efficient, and patient-centered healthcare system is greater than ever, and the companies that can build solutions here will unlock changes that improve the lives of millions of people for the better.
AI & SOFTWARE
Juxtaposition # 5
The rise of voice AI and continued API-ification of services will accelerate the rise of AI agents, opening the door for a whole new set of AI-based social engineering attacks and fraud
AND
it will be new AI-based solutions that can protect us from these more sophisticated attacks.
From smart speakers to voice-activated assistants, voice AI has quickly become mainstream. Add API-ification of services to the mix, and a new generation of AI agents are spurring major promise – and peril. The ubiquity and skill of voice-enabled AI agents, along with interconnected APIs, have created new vectors of risk for AI-based social engineering attacks and fraud.
Yet these same advancements in AI hold the key to counteracting these threats. AI-driven solutions that can detect anomalies, authenticate users, and identify patterns indicative of fraud will be the key to keeping our digital ecosystem safe moving forward. The future of cybersecurity will be shaped by this interplay between offensive and defensive AI technologies, and require constant innovation to stay ahead as threats evolve. By building companies that not only harness the power of AI but also prioritize security, we can pave the way for a safer, more efficient, and more sustainable digital ecosystem.
Juxtaposition # 6
AI is quickly evolving to do human work more efficiently
AND
the most immediate change will be “humans using AI” replacing “humans not using AI”
By now, it’s no secret that AI is transforming the way we work—and fast. Tasks that once required hours of human effort, creativity, and decision-making can now be streamlined, assisted, or even fully handled by AI-driven systems. From automating routine administrative tasks to generating complex insights in seconds, AI is reshaping industries by boosting efficiency, cutting costs, and reducing errors. And as these capabilities continue to advance, AI-driven automation isn’t just a competitive advantage—it’s becoming a necessity.
But here’s the thing: AI isn’t replacing humans. The real shift is that humans using AI will replace those who don’t. This isn’t about machines taking over; it’s about people leveraging AI to work smarter, make better decisions, and unlock new creative potential. Workers who embrace AI will outperform those who ignore it, just as businesses that integrate AI will outpace those clinging to outdated methods. The real divide won’t be between humans and AI—it’ll be between those who adapt and those who fall behind.
