Andreessen Horowitz (a16z) is placing a strategic bet that financial institutions cannot meaningfully adopt artificial intelligence without first modernizing their underlying infrastructure. The venture capital firm led a $25 million Series A funding round for Stitch, a cloud-native operating system designed to replace fragmented legacy systems at banks and financial institutions, marking a16z's first investment in the Gulf Cooperation Council (GCC) region.

Why Are Banks Struggling to Adopt AI Despite Massive Technology Spending?

The paradox is stark: financial institutions globally have spent over $1 trillion on digital transformation in the last three years, yet most still run on the same fragmented, legacy infrastructure that has defined the sector for decades. Banks spend $700 billion annually on technology, yet launching a new product still takes years, and upgrading a core system risks bringing operations to a halt.

The infrastructure gap has become existential now that artificial intelligence is reshaping every industry. No financial institution can meaningfully adopt AI without first having a clean, reliable system of record to build on, according to the company and its investors. As one executive explained, "AI on top of broken infrastructure is a dead end".

What Problem Does Stitch Actually Solve?

Stitch was built by operators who spent years at major financial institutions including NPCI, FIS, Barclays, Santander, and Azentio. The platform gives financial institutions a single, cloud-native stack spanning lending, cards, payments, and ledgers, one they can adopt gradually, module by module, without ripping out existing systems overnight. By replacing the fragmented core with a modern system of record, Stitch unlocks the AI transformation that institutions have been promised but cannot reach without the right infrastructure.

"Financial institutions globally run on fragmented, legacy infrastructure that should have been left behind 20 years ago. Now every institution wants to adopt AI, but AI on top of broken infrastructure is a dead end," said Mohamed Oueida, founder and CEO of Stitch.

Mohamed Oueida, Founder and CEO at Stitch

How Is a16z Thinking About Defense Technology and National Security?

Beyond fintech, a16z is also signaling a broader strategic shift toward defense and national security infrastructure. The firm welcomed General Bryan P. Fenton, the 13th Commander of U.S. Special Operations Command, as a Special Advisor to its American Dynamism practice. General Fenton brings 38 years of military service and deep expertise in how defense capabilities are actually fielded and adopted in the real world.

The appointment reflects a core principle in military technology: humans are more important than hardware. The point of better technology is not to replace the human mission, but to make the mission more effective, more survivable, and more decisive. Autonomous aircraft can fly ahead of manned fighters, software can compress critical decision cycles from hours to seconds, and new sensing, manufacturing, energy, and AI systems can give commanders better options faster.

"The founders building in this category need more than capital. They need strategic guidance from people who understand the mission, the customer, the institution, and the stakes," explained David Ulevitch, General Partner at a16z.

David Ulevitch, General Partner at Andreessen Horowitz

Steps to Understanding a16z's Infrastructure-First Investment Strategy

• Identify the bottleneck: a16z is targeting sectors where legacy infrastructure is the primary obstacle to innovation, not capital availability or talent shortages. In fintech, that bottleneck is fragmented banking systems; in defense, it is the speed of technology adoption.
• Recruit domain experts: The firm is bringing in advisors with deep institutional knowledge, such as General Fenton for defense and security, to guide founders through complex regulatory and operational environments that venture capitalists alone cannot navigate.
• Measure real-world traction: a16z looks for companies demonstrating rapid adoption and measurable impact. Stitch grew customer numbers 10-fold and revenue 20-fold in 2025, with over $5 billion transacted on the platform in just six months.

What Does Stitch's Traction Tell Us About Market Demand?

Stitch's growth metrics suggest strong market demand for infrastructure modernization in financial services. The company grew customer numbers 10-fold and revenue 20-fold in 2025, with more than $5 billion transacted on the platform in the past six months alone. The company currently operates across the GCC, Africa (including Egypt and Kenya), and Southeast Asia, with customers including Raya Financing, LuLu Exchange, Noqodi, and Foodics.

"Financial institutions are sitting on decades of infrastructure debt, and that debt is now the single biggest obstacle to AI adoption. What Stitch is building, a modern, unified system of record, is what makes everything else possible," said Alex Rampell, General Partner at Andreessen Horowitz.

Alex Rampell, General Partner at Andreessen Horowitz

The fresh capital from the Series A round will go toward accelerating product development, deepening Stitch's presence across the GCC and broader Middle East and North Africa (MENA) region, and expanding its global go-to-market operations. Existing investors Arbor Ventures, COTU Ventures, Raed Ventures, and SVC also participated in the round.

a16z's dual focus on financial infrastructure and defense technology reveals a consistent thesis: the most valuable companies in 2026 are not building flashy consumer applications or competing directly with large language models. Instead, they are solving the foundational infrastructure problems that prevent entire sectors from adopting the next generation of technology. For financial institutions drowning in legacy debt, and for defense organizations that need to move faster than ever before, that infrastructure modernization is no longer optional. It is the prerequisite for everything else.