According to the 2018 Q1 MoneyTree Report that was released recently, US-based Artificial intelligence startups enjoyed a record quarter as funding went up by 29 percent. Overall, all these companies together have raised $1.9 billion across 116 such deals. On the other hand, VC funding for Digital healthcare firms comes to $1.4 billion in Q1. And U.S. security companies raised just $528 million through venture capital, according to the report.
AI enjoys a rise in mega-deals
AI’s superb growth for Q1 can be attributed to loads of deals that have happened in the industry. Among prominent companies that benefitted from these deals include Pony.ai ($112 Million Series A), UiPath ($153 Million Series B) and C3 IoT ($100 million growth round).
AI is already on the market
AI startups are profiting from a lot of capital inflow of late, as technologies like Artificial intelligence (AI), Machine learning (ML), speech recognition and image recognition have just come out of research centers and have got launched in the commercial marketplace. As experts have predicted that AI will allow a greater level of personalization in major industries, people are waiting with bated breath for the technology revolution that is about to happen.
Companies are keen on gaining the competitive edge
All of the well-known tech giants such as Google, Facebook, Amazon, and Microsoft are investing heavily to maximize their competence in AI. But what comes as a surprise is that a huge number of startup firms are also giving heavy competition by developing new-fangled products and services that are powered by artificial intelligence.
AI startups that are leading the race
These AI startup companies have originated from Romania, China, Silicon Valley and China. Based in New York City,
UiPath is a Romania-origin software robotics corporation that employs AI to carry out digital busywork that humans are keen to avoid. UiPath’s $153 million funding round, led by Accel Partners, Kleiner Perkins Caufield & Byers, and capitalG, valued the company at $1.1 billion, the startup has announced.
Pony.ai, a Fremont, California and China-based self-driving car company founded in late 2016 by James Peng and Tiancheng Lou has $112 million from Legend Capital, Comcast Ventures, and Sequoia Capital China.
C3 IoT, a Redwood City, California-based Data Integration, Predictive Analytics, and Prescriptive Analytics company founded by Thomas Siebel, received $100 million from The Rise Fund, TPG Growth, and Sutter Hill Ventures.
VC investment in AI on the rise
Artificial intelligence was involved in three mega investment rounds out of 34 mega-rounds in upwards of $100 million in Q1 across the US. This is 34% of the overall VC money that arrived over the quarter.
Two of the three largest funding rounds in AI were early stage, following the trend of 10% deal growth for investments of that stage.
Earlier seed level investments in AI that help corporations to get launched comprised of just 26% of all investment rounds, having gone down from 35% in the quarter before.
In the US market, funding for VC-backed startups went up by 4% in Q1 over the previous quarter with $21.1 billion invested in 1,206 deals. However, the deal activity has gone down overall, falling by 2% over the quarter.