Hello, and welcome back to Inc.'s 1 Smart Business Story. It’s that time of year when we peer into our crystal ball to bring you Inc.'s calculated predictions about which companies are poised for a breakout year

While the exercise can feel fraught in 2026—between AI hype cycles, a shifting policy landscape and renewed speculation about IPOs—a few signals cut through the noise. For this year’s Companies to Watch list, Inc. senior writer Jennifer Conrad dug into a lengthy and decidedly less-glamorous research process, leveraging investor calls, internal debates and hours spent sifting through government websites to surface 16 businesses positioning themselves for major moves in the year ahead. 

What emerged is a snapshot of where real momentum is building: from consumer brands meeting real needs, AI companies delivering tangible value, to tech firms benefitting from changes in crypto, defense, supply chains, and trade policy. 

In this piece, you’ll see:

If you like spotting inflection points early—whether as an entrepreneur, investor, or a curious observer—this list is worth a closer look. As always, let me know what you think by emailing me at [email protected] and if you enjoy our newsletter, share this link with a friend to subscribe. 

In a year that could be a big one for IPOs and the AI bubble, here are 16 businesses that consumers, competitors, and investors need to track.

BY JENNIFER CONRAD, SENIOR WRITER 

Each year, Inc. compares notes, calls up investors, and pores over government contracts to determine which companies are poised to break out. This year could see IPOs from some of the biggest players in the generative AI space (OpenAI, Anthropic) and alternative financial exchanges (Kraken, Kalshi), as well as public listings for firms like Canva and SpaceX. 

But what about the lesser-known firms that are making big moves? While uncertainty reigns in Washington and on Wall Street, a few themes emerged in our research: Despite talk of a bubble, AI companies solving a real problem for companies still show promise. Unique products and online platforms can still excite consumers. And policies coming out of the White House could open opportunities for defense contractors and firms that help other companies monitor and manage their supply chains. Here are the companies we have our eyes on in 2026.

Founders: Grant LaFontaine and Logan Head
Location: Los Angeles 

Since launching in 2019, LaFontaine and Head have quietly built a massive livestream ecommerce business, with sellers hawking everything from collectible toys to vintage clothing to fresh produce. “They’re one of the fastest-growing marketplaces ever, and they go really, really deep in many verticals,” says Jane Alexander, a partner at Alphabet investment arm CapitalG, which has invested in Whatnot during three separate funding rounds.  

Most recently, CapitalG co-led Whatnot’s Series F round in October 2025, which valued the company at $11.5 billion. And the company ended 2025 with reported annual revenue approaching $1 billion. But livestream shopping has never gained the widespread popularity it enjoys in many Asian countries. And with the TikTok ban now off the table, Whatnot will have to compete with TikTok Shop and offerings from giants like Walmart and Amazon. Can it live up to its valuation?

“Many people are not paying as much attention to the Whatnots of the world that are growing as fast, and sometimes faster than AI companies, based on really understanding consumer behavior and delivering on a core consumer need,” says Alexander.  

Founders: Jack Kokko and Raj Neervannan
Location: New York City 

AlphaSense counts major firms such as Pfizer and Microsoft, as well as financial and VC firms, among its thousands of clients for its AI-based market intelligence. It’s raised $1.4 billion to date, according to CNBC, and is valued at $4 billion. Last October, the company announced it had reached $500 million in annual recurring revenue and, at the same time, said it had acquired theExcel modeling software firm Carousel. At the end of last year, AlphaSense made Inc.’s Best in Business list for Best AI Implementation and Best in Innovation.

Founder: Shiv Rao and Zack Lipton
Location: Pittsburgh

Jane Alexander believes that, going forward, AI will streamline individual workflows and bring software to areas that have not previously relied on it. Abridge, a transcription and clinical documentation drafting service aimed at the health care industry, is one of those companies, she believes. “Doctors love it,” says Alexander, whose firm has invested in Abridge. “It enables doctors and health care professionals to spend more of their time actually working with patients and less time on the administrative side,” she says. In June 2025, Abridge raised a $300 million Series E round led by Andreessen Horowitz, bringing the total raised to date to nearly $800 million, according to PitchBook.

Founders: Gabe Pereyra and Winston Weinberg
Location: San Francisco 

“I have lots of thoughts on the purported AI bubble, but I think there are still years of upside,” says Mike Vernal, an investor at Conviction. “There are a ton of applications that are creating real value, making real money, and growing in a real way.” He cites Harvey AI, which targets the legal profession, and OpenEvidence, which targets the health care industry, as “the cream of the crop.” Harvey AI has raised $988 million to date, including funding from Sequoia Capital, Vernal’s former employer. It’s currently valued at $8 billion, and last October, it reported $100 million in annual recurring revenue. There are still legal AI competitors such as Legora, based in Sweden, Luminance, and Thomson Reuters’ CoCounsel, as well as possible competition from OpenAI. But Harvey is currently used by 250 law firms—including 50 percent of The American Lawyer’s list of the 100 largest firms in the U.S.—and it’s only going to grow from there. 

Founders: Bret Taylor and Clay Bavor
Location: San Francisco  

Vernal praises Sierra AI, which brings agentic AI to customer service. Many consumer brands rely on its services, including the Gap, Wayfair, Rivian, and Weight Watchers. But Sierra will have a tough hill to climb to prove that it can provide AI chatbots that don’t drive customers crazy—and that aren’t vulnerable to mayhem. In December, a Sierra-powered chatbot used by the Gap was targeted by what the company called “malicious actors” and began providing answers on inappropriate topics from Nazi Germany to sex toys. Still, the company, valued at $10 billion, reached $100 million in annual recurring revenue in November, less than two years after its launch. Will the conversational AI market continue to grow? Or will customers sour on AI customer service?

Founder: Ben Witte
Location: New York City

Recess, which began as a line of CBD products in 2018, is carving out a new space for itself, leaving CBD regulations behind and instead selling “relaxation beverages,” such as magnesium-enhanced drinks and canned alcohol-free cocktails. In November, the company announced it had raised a $30 million Series B round led by Cavu Consumer Partners, the PE firm known for nurturing brands such as Oatly and Beyond Meat. Cavu’s last beverage investment? Poppi, the healthier soda brand that was acquired by PepsiCo in May 2025 for $1.95 billion. CEO Witte says the company has doubled revenue every year for the past few years and expects to double it again next year. As for a Poppi-style exit? “We definitely want to have that option,” he says.  

See ten more standout startups worth watching at Inc.com