The 5% Fallacy
Some of the loudest voices in the media continue to claim that only 5% of enterprises are realizing value from AI, but the data tells a very different story and Mercury’s portfolio proves it. Across our eight Native AI companies, enterprise customers realize measurable ROI within hours of pilot deployment. These aren’t hypothetical case studies; they are live examples of AI small language model (SLM) agents trained on specific customer datasets, automating workflows, and creating revenue value in record time.
The “5% adoption” statistic is both wrong and outdated. It comes from the first few years of GenAI, prior to the rise of Agentic AI. The reality is AI now drives efficiency and growth across every function in business: coding, product development, marketing, sales, and finance & admin. Mercury anticipated these rapid changes two years ago when we warned our legacy SaaS portcos to evolve or die. Those that adapted now run leaner, faster, and smarter.
According to data released by PitchBook, over the past 12 months, nearly 65% of all venture capital has flowed into AI-related startups, and the trend is accelerating. Market valuations in the public markets continue to rise for companies truly deploying AI because efficiency gains are real. Google and Meta’s mass layoffs weren’t cautionary tales; they were the first wave of AI-enabled productivity. The remainder of the Mag7 stocks soon followed, and the rest of the public market is now playing catch-up. Many public equity and hedge fund managers now project AI alone will add 2–4% annual growth to the S&P 500 over the next five years.
From a private markets perspective, Mercury portcos have positioned themselves appropriately as well. From Otto’s free AI transcription tool, which is undercutting $200‑a‑month incumbents, to Medify’s AI-powered healthcare navigation platform, which helps consumers manage rising healthcare costs while enabling employers and insurers to control spending, Mercury’s companies aren’t waiting for the future, they are building it. Our vertically-focused, Native AI companies, such as Collide in energy, OmniScience in clinical trial management, and Voze in industrial sales, aren’t rewriting software playbooks- they are defining them from the ground up.
AI’s implications, both the good and the bad, are real and here to stay. The impact on productivity is real. The impact on jobs is real. And the impact on power and water consumption is real. AI isn’t going anywhere; it is driving industrial transformation, the employment landscape, and how global resources are best utilized.
We now live in the Age of AI. At Mercury, we are backing the Native AI companies who move now, because the winners of this cycle will be the ones that learn and scale faster than the rest.
Mercury Fund Team Updates
Blair Garrou appeared on the TiE Houston Decoding Venture Capital panel where he shared insights on how funding decisions are made in the Age of AI, what investors prioritize at different stages, and strategies founders can use to stand out in a crowded market.
Adrian Fortino co-founded the inaugural Great Lakes VC Summit held in French Lick, Indiana, bringing together over 65 investors with more than $15B in AUM, from seven states. The summit was created to strengthen regional venture networks and accelerate growth across the Great Lakes ecosystem.
Aileen Allen launched an open-source marketing resource hub that includes functional responsibilities, job descriptions, leveling frameworks, interview processes, and growth profiles by role. Developed over a decade during her time as a GTM executive, the toolkit gives founders practical, battle-tested tools to structure and scale their marketing organizations—from compensation benchmarks to panel scorecards.
Aileen Allen's webinar unveiled insights from Mercury’s State of Early-Stage GTM Report, arming founders with benchmarks and strategies to sharpen their go-to-market engines. From funnel conversion rates and XDR impact to RevOps and compensation models, the webinar delivered practical guidance for early-stage teams scaling in today’s market.
Mercury Fund in the News
Aziz Gilani was interviewed by PitchBook on “vibe coding” - a breakthrough that makes it possible to turn ideas into applications faster than ever. Aziz emphasized both the opportunities and the risks - highlighting the need for rigorous testing, scaling, and data security as adoption accelerates.
Aziz Gilani shared his perspective with Carta on how shifting global trade dynamics and new U.S. tariffs created both uncertainty and opportunity. He noted that agile startups were best positioned to outmaneuver incumbents, reflecting what Mercury sees across its portfolio: disruption often sparks the next wave of category-defining companies.
Portfolio Company Updates
Ambiq completed a successful IPO on the NYSE. Mercury was proud to have seeded the company, which pioneered ultra-low-power semiconductor design through its SPOT® technology. By enabling AI to run locally on devices without draining battery life, Ambiq redefines whats was possible for wearables, industrial IoT, and edge computing.
ArborXR acquired InformXR to launch ArborXR Insights, a plug-and-play analytics suite that tracks learner performance, proves ROI, and integrates with 500+ LMS platforms. The acquisition strengthens ArborXR’s position as the leading enterprise XR device management platform used by over 3,000 organizations, including 60 Fortune 500 companies.
Cart.com ranked #9 on the Inc. 5000 list of fastest-growing private companies with more than $250M in revenue. The company also appointed Gregg Zegras as CRO. Zegras brings 25+ years of experience, most recently serving as President of Global eCommerce at Pitney Bowes. He will lead Cart.com’s unified sales organization as the company scales toward $1B in revenue.
OmniScience announced a strategic partnership with LabConnect to launch Vivo-Lab, the first-of-its-kind agentic AI solution for real-time clinical trial lab insights. Integrated into OmniScience’s Vivo platform, the collaboration unifies fragmented lab data, automates oversight, and surfaces risk signals enabling faster, more reliable decision-making in clinical research.
Plasma launched its mainnet and native token, XPL, with $2B in stablecoin TVL. With a fully diluted valuation above $8B, it is among the world’s top 10 blockchains. Launch products include Swarm (regulated tokenized equities) and Plasma One (a stablecoin-native neobank), advancing how digital dollars move globally.
Starlab appointed Marshall Smith as CEO to lead its transition from design to development and flight. A former NASA leader with 30+ years’ experience on Artemis, Gateway, and Aries I-X, Smith steps in as the company prepares to advance its commercial space station toward build and launch.
