Venture capital flows are undergoing a distinct rotation, moving away from traditional software investments and into defence and robotics.
This shift signals a broader preference for physical innovation over digital applications, as investors seek tangible assets and strategic sectors amid a cooling tech environment.
The pivot reflects a changing risk appetite among private equity and venture firms.
With software valuations facing pressure and exit routes becoming more constrained, capital is increasingly directed toward industries with clear geopolitical and industrial relevance.
Defence and robotics offer both growth potential and alignment with long-term security and automation trends.
This reallocation comes as private equity executives face a widening liquidity gap.