For a long time, venture capital was based on the idea that great technology made companies defensible. If a strong engineering team spent years building a product that was hard for others to copy, it gave founders a head start and investors confidence in long-term value.

Today, that assumption is being challenged.

With AI making it much easier to build software, companies can’t depend on technology alone to stay ahead. Products are copied faster, new competitors show up quickly, and entire markets can change in a short time. Now, both founders and investors have to ask not just what a company has built, but what makes it hard to replace.

Few people are thinking about this challenge more deeply than Raluca Ragab.

As a growth investor, Raluca looks at companies that have already grown a lot and want to become leaders in their field. With growth happening faster than ever, the usual signs investors look for are harder to read, so they have to rethink how they judge risk, staying power, and long-term value.

In this interview, Raluca talks about how software moats are changing, why customer success could become a key part of modern companies, how AI is changing growth investing, and why Europe might have more advantages than many founders think.

About Raluca Ragab

Raluca Ragab is a growth equity investor focused on partnering with exceptional founders across Europe as they scale from high-growth businesses into category leaders. Her investment interests span vertical and horizontal AI,  data infrastructure, developer tools and security, with a particular focus on companies navigating the journey from $20–30 million ARR to IPO.

Over the course of her career, Raluca has led growth-stage investments and served on the boards of several standout technology companies, including Israeli champions that later listed in the United States, such as Mobileye, Global-e, and WalkMe, as well as Europe’s first $1bn AI exit in 2025 in conversational AI, Cognigy.

About Eurazeo

Eurazeo is a top European investment group with over €35 billion in assets. They invest in private equity, private debt, real assets, and venture capital. With offices in Europe, North America, and Asia, Eurazeo supports ambitious entrepreneurs and management teams at every stage, from early innovation to global growth.

The firm’s Growth strategy focuses on helping tech companies with strong market positions and global potential to scale. Eurazeo offers not just funding, but also operational know-how, strategic advice, and access to a worldwide network of investors and industry leaders. They have backed some of Europe’s most successful tech businesses and are known for building long-term partnerships.

The end of the traditional software moat

For many years, technology was often the main reason a company could stay ahead of its competitors.

Founders would raise money, hire engineers, and spend years building unique products that others couldn’t easily copy. This technical edge underpinned their sales, marketing, and growth.

Now, Raluca thinks this is changing.

"An AI-native competitor can replicate your core architecture in months," she says. "So that entire premium that you had for having been earlier, having spent a lot of time in engineering, is gone."

This shift has big consequences. If technology can be copied more quickly, investors have to reconsider what really makes a company defensible. "We have to rethink what an engineering moat is. Is there such a thing anymore? Is it even possible anymore? And if so, how strong is it?"

The challenge goes beyond just technology. It also affects how companies are valued. Many traditional valuation methods assume software companies will continue to generate profits for a long time. But as it gets easier to enter the market, investors are starting to ask tougher questions.

"We are actually being forced to really think if some of the businesses that we fund today have terminal value anymore," Raluca says. "Will these businesses? For growth investors, this uncertainty changes the whole game. Uncertainty changes everything.

"An AI-native competitor can replicate your core architecture in months."

Why customer success is becoming the new moat

If technology alone is no longer enough, where does defensibility come from?

For Raluca, the answer starts with customers.

"The businesses that will be differentiated will be the ones that understand they actually have to be much closer to their customers," she says.

While AI may reduce the engineering effort required to build products, it also creates opportunities to deliver far more customized experiences.

"The beauty of AI is that your product can be much more customized, and the cost of that is much lower."

Because of this, she thinks customer success will become much more important than it was in the past.

"I think a customer success function is going to explode because people are going to understand that's the only way to keep customers from churning."

Companies that spend more time listening to their customers get something very valuable: unique feedback and data on how their products are used.

"If you are collecting feedback from customers every day, that results in a body of data that allows you to create an ever-superior product."

This advantage builds over time. When companies understand their customers better, they make better products, attract more customers, and get even more feedback.

Competitors may have access to similar AI tools and engineering capabilities, but they won't necessarily have access to the same customer relationships.

"They might have the same engineering capabilities, but they will not be able to produce the product people really want."

"The customer still has to be driving the product."

From productivity tools to revenue engines

Many AI products today are designed to make work more efficient. They automate tasks, reduce manual work, and help teams do more with less. But Raluca thinks the biggest opportunities lie elsewhere.

"I think we're tempted right now to pick the tool that makes a workflow faster," she says. That's understandable. Productivity gains are often the most visible and immediate outcome of AI adoption.

However, she believes the next wave of leading companies will aim higher. "The category leaders will become the ones that go into a company and redo the entire workflow and extract so much more value," she says.

Instead of delivering incremental improvements, these companies will fundamentally change how organizations operate. “They have the chance to be big revenue drivers."

AI enables businesses to understand customer behavior in ways previously impossible. Data that once sat in disconnected systems or individual employees' heads can now be analyzed, connected, and turned into actionable insight.

"Before, this knowledge was sitting in the minds of different people in silos, and it was very hard to extract conclusions from it."

She believes the winners will be the companies that use these insights to predict what customers need and create new ways to make money.

"The category leaders will become the ones who create new revenue streams."

Why growth investing is getting harder

At first, AI seems to be opening up huge growth opportunities. Companies are growing faster than ever. But for growth investors, this speed brings new challenges.

"The numbers may look like growth," Raluca explains. "You have companies right now at $50 million revenue, but the reality is that it’s more difficult for us to understand signals from those numbers."

In the past, growth investors relied heavily on data. Metrics such as customer retention, renewal rates, churn, and unit economics helped them assess risk. Now, many companies hit growth-stage revenue before these signals even show up.

"When companies are now going from three million to twenty million in one year, effectively all the customers have been acquired in the last six months." That means investors often haven't yet seen customers renew contracts or demonstrate long-term engagement.

"You don't know if those customers are experimenting with your tool and then churning the moment they're up for renewal," she explains.

Meanwhile, many high-growth businesses remain surprisingly immature internally. "When you really lift the hood and look inside at their processes and operations, they look more like Series A companies."

As a result, execution risk has increased significantly. “We're all having to learn how to invest at this stage from scratch," she adds.

"When you look behind the scenes, the foundation of a company may look more like a Series A company than a growth-stage company."

Europe's overlooked advantages

Even with all the challenges for software companies worldwide, Raluca sees special opportunities in Europe. One of these is in highly regulated industries.

Healthcare, financial services, tax, legal technology, and other sectors with deep domain expertise remain difficult to disrupt. "These are things you can't wing," she says.

Tough regulations make it hard for new companies to enter the market, and long sales cycles with cautious customers make relationships even more important. "Because it's painful to get in, it's also painful to get out," she says.

Another opportunity comes from Europe’s strong industrial base. "If there's something Europe still has, it's an industrial and manufacturing base." Many of these sectors haven’t yet been changed much by modern software and AI, so there’s a lot of room for new ideas.

Europe's engineering heritage and manufacturing expertise, in her view, create a genuine competitive advantage. Founders building software for manufacturing, construction, engineering, and industrial workflows may be sitting on some of the largest untapped markets available today.

"It's almost like a home advantage for Europe."

The mindset founders need today

Raluca thinks the most important mindset for founders is to think like their future competitors. "Every business that's already done a Series A is almost an incumbent by definition."

Because AI is moving so fast, companies can’t just rely on being first anymore. Founders need to keep asking themselves, "What would I do if I started this company today?"

This kind of thinking often reveals outdated assumptions, unnecessary steps, and outdated processes that need to be changed. She says, “You need to get there ASAP because if you're not getting there, your competitor is."

She also thinks AI will change how companies are set up. Information now moves faster and more directly than ever because "the information flow has compressed."

Because of this, founders might be able to build bigger companies with fewer people and less hierarchy. “You can build a bigger company with fewer people," she says.

In the end, she believes founders need to get used to always reinventing their businesses.

The most successful companies will be the ones that keep improving themselves before someone else forces them to change.

"The moat of all the years founders spent engineering and getting to a certain product has all but disappeared."

Quick-fire round

A tool you can't live without?

"WhisperFlow. It's a speech-to-text tool that allows me to leave long written messages through voice."

How do you recharge?

Travel always. Just getting on a plane already makes me happy. Otherwise, a matcha in the morning and Pilates before work."

Advice that has stayed with you?

"Do things when they arrive on your plate. Don't postpone them. I never want to feel under pressure, and I think pressure often leads to lower quality outcomes."

A founder you admire?

"Michael Reitblat at Forter. Every time I speak with him, he's already thought about the hardest questions I could ask."

The next era of defensibility

If the last decade in software was all about technical advantage, the next one might be about something different—like understanding customers, adapting quickly, running operations well, having deep expertise, or strong distribution.

Raluca thinks founders can’t count on technology alone to keep them safe anymore. Instead, they need to keep rethinking their businesses, stay close to their customers, and question their own assumptions before competitors do.

Investors face just as big a challenge. Old ways of judging companies still matter, but many of the signals they once trusted are changing. This makes the market uncertain, but also full of new opportunities.

As Raluca puts it, the question every founder should ask themselves is simple: "What would I do if I started this company today?"

Companies that answer this question honestly could become leaders of the AI era. If this sounds like you and you’re looking for growth-stage funding, reach out to Raluca today.