QED Investors, a venture capital firm based in Alexandria, Virginia, that is focused on investing in Fintechs, has shared some end-of-year insights with CI. QED Investors, which also invests in financial services initiatives in the U.K. and Europe, Latin America, India, and Southeast Asia, has commented on a range of developments it expects in 2026.
As covered, QED Investors aims to help build businesses through a hands-on approach that leverages its partners’ operational experience, assisting companies to achieve steady growth.
Some of QED Investors‘ investments include: AvidXchange, Betterfly, Bitso, Caribou, ClearScore, Creditas, Credit Karma, Current, Flywire, Kavak, Klarna, Konfio, Loft, Mission Lane, Nubank, QuintoAndar, Remitly, SoFi, Wagestream, Wayflyer, and more.
QED team’s predictions are shared below.
QED Investor’s Predictions
Nigel Morris | Co-founder and Managing Partner:
“Expect the rise of dynamic credit scoring. As underwriting models become more capable of interpreting alternative data streams (such as banking & transaction data or rent & utility payment information), lenders will be able to assess borrower risk dynamically. This approach is already gaining traction in developing markets. We will be monitoring for the burgeoning of a “Streaming Credit Score” system, particularly for gig economy workers and borrowers with thin files, which updates continuously rather than quarterly or monthly.”
Expect the rise of dynamic credit scoring. As underwriting models become more capable of interpreting alternative data streams
Bill Cilluffo | Partner, Head of global early stage investments:
“There are many things I admire about the founders I meet today, one thing being the pace of change of what’s possible in the world is easily the fastest in my 30 years in business. AI is allowing things that weren’t possible three years ago, and the pace of that change is staggering. I am floored on how well most founders are able to stay on top of this, and leverage these new tools so well. And there is a lot more to come!”
AI is allowing things that weren’t possible three years ago, and the pace of that change is staggering
Chuckie Reddy, Partner, Head of Growth:
“The year 2026 will be an execution year. Companies are largely on solid footing. It will be about executing on growth, finding M&A / IPOs and being profitable enterprises. The macro environment remains largely benign, making this the best time to focus on pure execution. While there can always be wobbles, the industry as a whole has been well funded and stabilized/capitalized businesses that have a “right-to-win”. Development is accelerating at the most rapid pace we’ve seen in recent history. The already ‘to ship’ code/product is tremendous.”
Development is accelerating at the most rapid pace we’ve seen in recent history
Amias Gerety | Partner, Head of U.S. Investments:
“VC investors are focused on the potential TAM expansion from using AI to automate the work of human operations teams, but the truth is that any cost savings can only create TAM in the short term. If a company replaces a business process outsourcing contract in year one, then an AI company that can replace that work only needs to be cheaper than that contract. But in years two and beyond, the competition is not between AI and a BPO; it’s between two AI companies. Put another way, VCs are missing the power of competition to drive margin down in the age of AI.”
VCs are missing the power of competition to drive margin down in the age of AI
Yusuf Özdalga | Partner, Head of U.K. & Europe at QED:
“Valuations will normalize: As the best (and worst!) use cases for AI at scale in Fintech become clear, AI valuations will also start to normalize. A full understanding of the all-in costs of using AI will become clearer, and AI valuations will be driven more by financial math than in 2025. The cost stack of inference, in terms of tokens, dollars and margins, will force increased discipline and clarity on AI unit economics. This will also be magnified by increasing LP pressure on GPs for returns and liquidity.”
Laura Bock | Partner, U.S.:
“Accounts Receivable (AR) and Accounts Payable (AP) are interesting because they sit right where money actually moves through a business. They touch every customer and vendor relationship, yet workflows remain painfully manual. That mix of volume and financial consequence makes them perfect for automation: a small improvement in how invoices are sent, collected, approved or paid can free up cash, reduce errors and meaningfully improve working capital.”
Shruti Batra, Principal, U.S.:
“Investors are mistaking early AI traction for durable advantage and overestimating how much value comes from ‘AI magic’ rather than owning the underlying workflow. AI compresses build cycles so quickly that categories fill with credible-looking entrants within months, meaning early revenue or user growth often signals category immaturity rather than true product-market fit. The real moat isn’t the model – it’s the workflow depth, data rights, integrations and compliance scaffolding required to run in production. In a world where anyone can build, winners will be those who can operate, integrate and earn institutional trust and, as such, investors should underwrite staying power over velocity.”
Cole Lundquist, Principal:
“We’ve seen whipsawing interest between horizontal and vertical solutions as founders and investors have digested the power of AI. When simple agents were cutting-edge, a wave of focused, vertical solutions came to market. Those solutions quickly became commoditized. As agents grew in sophistication and capital surged into the market, interest shifted to horizontal solutions that promised to be everything to everyone and required outrageous sums of capital to get there. While horizontal solutions are well-suited to addressing megafunds’ capital deployment needs, it’s unclear where the market equilibrium will settle. As it stands, horizontal solutions command the hype, while verticals attract more tepid interest.”