In the midst of growing turbulence in the pre-seed funding landscape, San Antonio-based venture capital firm Active Capital has unveiled a $28 million fund aimed at addressing one of the most precarious choke points in the startup journey: the funding gap for early-stage B2B SaaS startups. With fewer checks being written and macroeconomic uncertainties tightening investor sentiment, the firm’s focus on B2B software founders in emerging ecosystems stands out as a confident bet on a segment that many investors are currently avoiding. This new fund, announced in January 2025, comes at a time when sustaining innovation requires not just capital, but conviction and calculated optimism.
Bridging the Pre-Seed Gap in a Narrowing Market
The pre-seed environment has altered dramatically since the bullish years of 2020–2021, with Crunchbase reporting a continued decline in both the volume and value of pre-seed deals across the U.S. in Q4 2024. According to Active Capital founder and general partner Pat Matthews, the firm’s strategy combats a particularly acute problem: the early stages of company formation, where founders outside of major tech hubs like San Francisco or New York often struggle to capture VC attention. Matthews emphasizes that strong SaaS businesses can be “built anywhere — not just Silicon Valley.”
This perspective aligns with broader patterns. According to a 2024 McKinsey Global Institute study, nearly 27% of SaaS startups in the U.S. now originate outside major innovation centers, highlighting a decentralization trend accelerated by remote work and cloud-native infrastructure.
Active Capital intends to support around 50 startups over the next four years, deploying between $250K and $750K per investment. Matthews and his team deploy funding at the pre-seed and seed stages with a sharp focus on cloud-based software companies — a model that dovetails with ongoing enterprise digitization, particularly in sectors such as logistics, healthcare, and fintech.
Betting on B2B SaaS and AI Synergies
While the macro outlook on venture capital remains wary, B2B SaaS revenues have shown resilience. According to a January 2025 report by Investopedia, revenue from B2B software products continues to grow at a 14% CAGR despite overall venture funding declining 33% from its 2021 peak. This is tied to high retention rates, tighter integration with enterprise workflows, and the increasing infusion of artificial intelligence into core product functions.
Active Capital’s latest fund positions it well to ride the crossover between SaaS and generative AI. New seed investments are expected to prioritize AI-native tooling and infrastructure, areas that benefit from cloud-first design. As indicated by a VentureBeat forecast, the global enterprise AI market is expected to exceed $158 billion by 2025, with AI-driven SaaS solutions comprising more than one-third of that volume.
This trajectory is further underscored by the operational focus of SaaS startups on process automation, natural language processing, and ML-based analytics. According to DeepMind’s 2025 industry landscape projections, the model shift from “LLM as a service” to domain-specific mini-models will allow smaller players to differentiate within vertical software categories such as accounting, HR, and compliance automation. This creates fertile ground for small, focused venture funds like Active Capital to deliver returns by backing technically competent teams who build hard software, not just front-end interfaces.
Geographic Arbitrage and Cost Efficiency
Securing talent and infrastructure in non-coastal markets continues to be one of the most lucrative arbitrage opportunities in B2B SaaS. According to Gallup’s Workplace Study 2025, regions like Austin, Salt Lake City, Charlotte, and Nashville show significantly lower median startup burn rates while maintaining access to qualified tech talent pools. This aligns directly with Active Capital’s strategy of investing outside saturated ecosystems, enabling extended runways and capital efficiency — vital in a world driven by sustainable unit economics.
Additionally, cloud infrastructure costs remain top-of-mind for early-stage founders. As detailed in NVIDIA’s Q1 2025 cloud report, optimizing AI inference pipelines is now a major growth area for SaaS startups, which must deal with increasingly prohibitive compute costs. Active Capital’s portfolio is expected to include companies building application-level efficiencies across both compute and storage layers, especially those leveraging hybrid AI deployment models to curb dependency on large-scale LLMs hosted exclusively by OpenAI or AWS.
Funding Volume vs. Fund Size: Trends in 2025
Active Capital’s $28 million fund may appear modest compared to the megafunds dominating headlines, but it represents a microcosm of a wider funding recalibration. According to CNBC Markets, funds ranging from $20 million to $50 million saw a resurgence in Q1 2025, bouncing back 9% year over year as LPs turned to sector-focused specialists with leaner portfolios and direct founder engagement. These micro-VCs are filling a critical gap left by traditional seed players who have moved upstream in search of more de-risked opportunities post-Series A.
| Fund Size Category | Avg # of Investments | Avg Deployment Per Startup |
|---|---|---|
| $20M–$50M | 40–60 | $250K–$1.2M |
| $51M–$150M | 25–40 | $1M–$3M |
| $151M+ | 15–20 | $3M–$8M+ |
What’s also notable is how Active Capital combines capital with operational mentoring tailored to early-stage founders. In a startup environment increasingly starved of support post-funding, this collaborative model offers differentiation. As LPs tighten diligence on fund managers, firms capable of demonstrating mentorship DNA and successful SaaS exits, like Active Capital, tend to outperform peer groups with similar fund sizes.
AI Infrastructure and The Next Wave of Vertical SaaS
The intersection of AI and SaaS is moving from general-purpose use cases toward highly targeted vertical applications. Companies in niche markets such as fleet management, insurance underwriting, and employee engagement are developing proprietary data layers, integrating AI models trained specifically to optimize those domains. A 2025 report from The Gradient highlights this trend, suggesting that “vertical SaaS trained on domain-specific knowledge graphs is outpacing generic AI adoption in enterprise software.”
This evolution plays directly into Active Capital’s wheelhouse. By concentrating firepower on B2B startups building tech for overlooked professional users — think logistics planners, clinic administrators, or field technicians — the fund aims to support companies whose value is derived less from hype and more from acute workflow painkillers. As AI Trends describes in its January 2025 outlook, “The next unicorns will solve boring but painful problems faster, cheaper, and better using AI.”
Looking Ahead: Strategic Implications for 2025 & Beyond
In 2025, the broader venture ecosystem continues to show signs of cautious recovery, but the pre-seed segment remains highly selective. More investors are observing first and funding later. In this context, Active Capital’s new $28 million vehicle sends a powerful message: bold bets at the formation stage, especially on SaaS products backed by technical teams outside traditional market centers, can still deliver returns even in hostile waters.
Key industry players are taking note. OpenAI’s CEO recently reaffirmed support for smaller model builders by announcing the release of GPT-5 APIs optimized for lighter implementation footprints, potentially reducing compute costs by 40%, according to OpenAI. This directly benefits emerging SaaS startups that rely on model integration without extensive infrastructure overhead.
In sum, smaller, sharper funds like Active Capital may represent the new vanguard of early-stage investing. With lower overhead, deep focus, and a strong read on macro-fintech and AI enablers, they are structurally closer to the problems their founders are solving. As venture rebalances for efficiency and precision in 2025, Active Capital’s approach may serve as a template more firms begin to emulate.