2026 State of Scaling: The Great Sorting (ICONIQ)

Summary

• The software index fell 3% over the past year, while semiconductors led with a 47% gain.p.8
• The share of U.S. businesses paying for AI products and services rose from 7.5% in January 2023 to 50% + by July 2026.p.8
• Pacesetters reach $100M ARR in just 1-3 years, with new logo ARR accounting for 70%+ of gross new revenue.p.9
• Pacesetters spend 284% of revenue on OpEx versus 124% for others.p.9
• As of early 2026, 70%+ of employees across ICONIQ portfolio companies are daily active users of AI tools.p.10
• The analysis covers 137 software companies.p.4

Key insights

1. Pacesetters under $100M ARR remain roughly 5.6x more unprofitable than peers.p.9
2. Pacesetters with $100M+ ARR maintain a sub-1x burn multiple in 2026.p.9
3. Companies growing 100%+ show median headcount growth of 146% in 2026 versus 115% in 2025.p.10
4. Several public software companies have reduced headcount by 10-20% this year.p.8