VC Survey 2026
“In 2026, the market will prioritize velocity”
YL Ventures senior partner Ofer Schreiber joins CTech to share his outlook for the coming year, from how the market is measuring growth to the limits of AI, as part of the VC Survey 2026: The Next Leap.
“Investors are looking for proof that a startup’s engine is not just running, but accelerating,” says Ofer Schreiber, senior partner and head of the Israel office at YL Ventures. In 2026, he believes “the market will prioritize velocity,” which he approximates as “how quickly a team captures market share of a new problem space or displaces incumbents in an existing category.”
Following the turbulence of recent years and the stabilization of 2025, the Israeli tech ecosystem is entering a new era: The Next Leap. Schreiber joined CTech to share insights for its VC Survey 2026, which invites prominent investors to discuss the topics, trends, and “leaps” expected in the year ahead.
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Ofer Schreiber, senior partner and head of Israel office, YL Ventures
(Photo: Tammy Bar-Shay)
Schreiber argues that overzealous ambitions for sectors moving to full AI autonomy remain unrealistic given the current reality: fully autonomous systems require a level of reliability and security that existing AI technology still falls short of delivering. Further, while the market may be fixated on generative AI for productivity, Schreiber says “the real opportunity for the coming year lies in the verification of digital reality.”
He also lauds the strength of Israel’s cyber ecosystem, describing it as having “evolved into the central production floor for global security innovation,” with last year’s funding rounds “proving that technical and operational momentum remains disconnected from geopolitical volatility.”
You can read the entire interview below:
Fund ID
Name of Fund: YL Ventures
Total Assets Under Management (AUM): $800M
Partners/Managers: Yoav Leitersdorf, managing partner, Ofer Schreiber, senior partner and head of Israel office, and Kirk Manoogian, partner
Notable Portfolio Companies (Active): Minimus, Mind, Miggo, Opti, Grip, Hush, Cycode, Orca, MCPTotal, Valence
Notable Exits: Aim Security, Axonius, Medigate, Twistlock, Hexadite, Spera
The Valuation Leap: Moving past the market correction, what is the single most critical metric (e.g., EBITDA, NRR) that will drive premium valuations in 2026?
In 2026, the market will prioritize velocity. Premium valuations will be reserved for companies that demonstrate exceptional speed in GTM execution and a rapid, consistent expansion of their pipeline. Investors are looking for proof that a startup’s engine is not just running, but accelerating. This momentum, measured by how quickly a team captures market share of a new problem space or displaces incumbents in an existing category, is the most reliable leading indicator of product-market fit and long-term dominance. In a volatile environment, the ability to execute and scale at pace is what commands a true market premium.
The Agentic Leap: As we transition from 'Copilots' to autonomous 'Agents,' which specific vertical will be the first to fully trust AI with independent decision-making?
The transition to full AI autonomy remains obstructed by a fundamental architectural hurdle: the non-deterministic nature of current AI models. We are operating within a significant trust deficit where the unpredictability of model outputs, compounded by critical security vulnerabilities like prompt injection, precludes independent decision-making in high-stakes environments.
Until we move past the era of hallucinations and establish a framework where AI behavior is entirely trusted and secure, the "human-in-the-loop" model remains a non-negotiable safeguard. Most verticals will resist total adoption because, in the enterprise, the inability to guarantee a specific outcome is an unacceptable risk. Autonomous agency requires a level of reliability and security that current AI technology has yet to satisfy.
The Sovereign Leap: Have the geopolitical lessons of recent years pushed Israeli startups to build independent, 'sovereign' tech stacks to reduce reliance on global platforms?
Israeli cybersecurity has evolved into the central production floor for global security innovation. This past year alone, the ecosystem reached an outstanding $5.1B in funding across a record 136 funding rounds, proving that technical and operational momentum remains disconnected from geopolitical volatility. We are seeing a new level of maturity where Israeli founders are no longer just building for an exit but are actively consolidating the market. Leading Israeli firms are now the primary acquirers, purchasing younger local startups to build massive, all-encompassing platforms in-house. Global investors have responded to this shift by moving upstream and leading seed-stage rounds more frequently than ever before. This surge in international conviction and local consolidation confirms that the Israeli ecosystem is the essential source of the world's most critical security infrastructure.
The Efficiency Leap: In the era of AI-driven hyper-productivity, is the traditional correlation between 'Headcount Growth' and 'Company Success' permanently broken?
In certain sectors, the link between headcount and success has effectively vanished, but in high-stakes industries, it remains a structural necessity. Pure software plays and lightweight SaaS applications can now scale to significant heights with almost zero overhead. However, the cybersecurity market operates on a foundation of human accountability that AI cannot replicate. Navigating the long sales cycles, complex go-to-market strategies, and high-touch support required by the enterprise still demands a substantial human presence. Customers in sensitive, heavily-regulated industries prefer to rely on human production because automated systems do not generate the trust required for mission-critical partnerships. While AI creates massive internal efficiencies, scaling headcount in customer-facing roles remains the essential signal of credibility needed to win the world's most complex organizations.
The Contrarian Leap: What is one sector or trend currently ignored by the herd that you believe represents the most undervalued opportunity for the coming year?
While the broader market remains fixated on generative AI for productivity, the real opportunity for the coming year lies in the verification of digital reality. We have reached an inflection point where the cost of creating hyper-realistic disinformation has dropped to near zero, transforming deepfakes from a niche concern into a primary threat to institutional stability. In 2026, synthetic identities are being used to bypass executive authentication and manipulate financial systems, posing a fundamental risk to brand integrity. This has become a systemic challenge to the foundations of trust in global business and geopolitics. The winners in this space will be the builders who can provide high-fidelity authentication at scale, securing the information integrity that modern organizations now require to function.
Finally, what are 2-3 startups that, in your opinion, are likely to make a leap forward in 2026?
1. Minimus (YLV portfolio company): Led by the core team behind Twistlock, Minimus is solving the "vulnerability noise" crisis that paralyzes modern enterprise security. Most companies are drowning in thousands of known vulnerabilities (CVEs) found in the "bloated" software building blocks they use. Minimus provides a library of "lean" building blocks stripped of all unnecessary and risky code, effectively removing 97% of the digital "backdoors" before an application is even built. Their new Image Creator allows developers to build custom, enterprise-ready software that is secure by default, turning security from a bottleneck into a competitive speed advantage.
2. Factify: Factify is spearheading a fundamental architectural shift within the document infrastructure category. While the market is saturated with incremental tools designed to edit or sign legacy PDFs, Factify is undertaking a total replacement of the thirty-year-old "digital paper" standard. Their recent $10.3M pre-seed round provides the significant capital necessary to execute this overhaul, moving beyond simple file management into a model where documents function as secure, cloud-connected applications. They are positioned to leap ahead because they solve the primary vulnerability of modern business: the total loss of control, visibility, and security that occurs the moment a file is downloaded or shared. By ensuring that sensitive information remains a living, self-auditing object that is immune to unauthorized AI scraping, Factify is establishing the new standard for how high-stakes enterprise data is captured and controlled.
