On this Friday the 13th, I didn’t have to try hard to come up with a scary story for you.
It all started a little over a week ago. Everything in the public and private markets for 2026 seemed as normal as can be. We were all talking about the bizarre, AI-old social network that is Moltbook. And then, advancements in enterprise AI agents like Claude dropped and it all still seems pretty normal (after all, the models get updated and improved all the time).
But public market investors started to take this in, questioning the assumptions on which the sprawling software-as-a-service (SaaS) industry is built. There have been all sorts of concerns for a while, including shenanigans around using metrics from SaaS to apply to AI-native companies (that logic is specious at best).
Then, a relentless selloff materialized: As of market close yesterday, over the last five days, Salesforce is down more than 3%; Adobe is down 3%; Docusign is down 5.5%; and Workday is down more than 10%. (These numbers include some recovery from the lowest lows.) These companies are among the hardest hit in what has now been termed “SaaSpocalypse.” And if you’re wondering how this applies to startups and private markets, the answer is simple. It names an open secret: That after a year of whispered chatter, the industry still has no real playbook for making money in enterprise AI. And that the certainties of the SaaS era have vanished like Jason (seems to) at the end of the first Friday the 13th movie.
“The software slump is proving that code alone was never a real moat,” said Zach Lloyd, CEO and founder of AI agent startup Warp, via email. “For VCs and founders, this changes everything: you can’t bet on execution anymore when the cost of building software is going to zero. The question is now ‘what’s stopping someone from copying this next week,’ and if your only answer is ‘we have good engineers,’ you’re in trouble.”
This all is likely a little overblown, but the essential question remains, said Dell Technologies Capital’s Daniel Docter.
“The highs are never as high as they really are, and the lows are never as low as they are,” Docter told Fortune. “I think this is probably overdone a little bit in terms of this near-term reaction. But the longer-term question—the most important question—is, will AI displace a significant portion of SaaS software or SaaS revenue?
That’s easily hundreds of billions, or even trillions in value, up in the air. And what’s scarier than uncertainty?
We’re off for the long weekend! See you Tuesday,
Allie Garfinkle X: @agarfinks Email: [email protected] Submit a deal for the Term Sheet newsletter here.
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The post A scary SaaS selloff changes the calculus for startups and private markets: “code alone was never a real moat” appeared first on Fortune.
