TechCrunch Startup News VCs deploy ‘kingmaking’ strategy to crown AI winners in their infancy
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Dec 4, 2025 Venture capitalists are taking their 'king-making' strategy to the next level by making hefty early investments to establish market leaders. This approach contrasts with historical funding tactics that focused on leveraging capital later in a startup's journey. Meanwhile, AI ERP startups are seeing rapid funding rounds as companies like Dual Entry secure significant valuations despite disputes over their growth figures. The discussion highlights how substantial backing can enhance a startup's credibility and potentially reshape the competitive landscape.
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Big Round Despite Modest Revenue Claims
- Dual Entry raised a $90M Series A at a $415M valuation despite reportedly low ARR earlier in the year.
- The founder Santiago Nestares disputes the lower revenue figure reported by a VC who declined to invest.
King-Making Starts Much Earlier
- VCs are using 'king-making' by pouring large capital into one startup to overwhelm competitors early.
- The tactic now happens much earlier in company lifecycles than in prior cycles.
Capital As A Weapon Compared To Ride-Hailing
- David Peterson compared today's early capital tactics to the 2010s 'Capital as a Weapon' era.
- He cited Uber and Lyft as canonical examples where heavy funding came later at Series C/D rounds.