Q3 Startup Market Trends and Insights

ARTIFICIAL INTELLIGENCE

July 2017

Artificial Intelligence (AI) report outline

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This report provides an overview of the AI technology sector and is broken down into three sections

Sector Description

High-level sector metrics, innovation quadrant, and

category definitions

Trends & Insights

Infographics and data points for the artificial intelligence

technology sector

Quarterly Activity

Major funding and exit events from the previous

90 days

Venture Scanner reports are built by analysts utilizing our startup database and research platform

Sector Description

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AI technology startups are creating new businesses in 13 categories

The full Venture Scanner market report and database tracks 1,878 companies

with $18B in funding

ARTIFICIAL INTELLIGENCE

The graphic above shows only a sampling of companies in each category, data as of July 2017

Computer Vision Platform Computer Vision App Smart Robots Gesture Control Speech Recognition

Machine Learning Applications

Virtual Assistants Recommendation Engines Video Recognition Context Aware Computing Speech to Speech Trans.

Machine Learning Platforms

Natural Language Processing

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Innovation quadrant for AI

This quadrant shows a relative segmentation of the categories with respect to one another, data as of July 2017

Average Funding

ESTABLISHED HEAVYWEIGHTS

PIONEERS DISRUPTORS

Machine Learning Platforms

Ave

rage

Age

Machine Learning Applications

Smart RobotsComputer Vision Platforms

Recommendation Engines

Speech to Speech Translation

Speech Recognition

Natural Language Processing

Gesture Control

Video Recognition

Context Aware Computing

Computer Vision Applications

Virtual Assistants

AI startups play in many different categories (1 of 2)

6Category stats as of July 2017

Computer Vision/Image Recognition Applications214 Startups, $1.1B Total FundingCompanies that utilize technology to process images for vertically specific use cases, such as searching for a retail item by taking a picture

Context Aware Computing33 Startups, $132M Total FundingSoftware that automatically becomes aware of its environment and adapts its behavior accordingly, such as turning on lights when a room becomes dark

Computer Vision/Image Recognition Platforms191 Startups, $2B Total FundingCompanies that build technology that process and analyze images to derive information and recognize objects from them

Deep Learning/Machine Learning Platforms 256 Startups, $2.9B Total FundingCompanies that build computer algorithms to optimize results based on existing data, such as for predictive data models

Natural Language Processing304 Startups, $2.2B Total FundingCompanies that build algorithms that process human language input and convert it into understandable representations, such as mining text into data

Deep Learning/Machine Learning Applications 570 Startups, $8.3B Total FundingCompanies that use machine learning algorithms on existing data in vertically specific use cases, such as detecting banking fraud

Gesture Control 60 Startups, $694M Total FundingCompanies that enable one to interact with devices through gestures, such as controlling video game avatars through body motion

Personalized Recommendation Engines 102 Startups, $1.5B Total FundingCompanies that predict the preferences and interests of users and deliver personalized recommendations to them, such as music playlist building software

AI startups play in many different categories (2 of 2)

7Category stats as of July 2017

Smart Robots168 Startups, $2.8B Total FundingRobots that can learn from experience and act autonomously based on conditions, such as retail robots that help customers find items in stores

Speech to Speech Translation 21 Startups, $45M Total FundingCompanies that recognize and translate human speech in one language into another language automatically and in near-real time

Virtual Assistants 186 Startups, $1.3B Total FundingSoftware agents that perform everyday tasks and services for an individual based on commands, such as customer service chatbots on websites

Speech Recognition 163 Startups, $1.1B Total FundingCompanies that process human speech and derive meaning from it, such as software that detects voice commands and translates them into actionable data

Video Automatic Content Recognition 24 Startups, $104M Total FundingCompanies that compare a video sample to source files to identify the content through its unique characteristics, such as for copy right enforcement

Sector Trends & Insights

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Investing into the sector is occurring across a variety of categories

The Machine Learning Applications category accounts for 34% of venture funding and 25% of total companies in the AI sector

Venture Investing in AI

Companies are categorized by function, and therefore can exist in multiple categories. Data through July 2017

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VC Funding Count

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VC funding into AI has accelerated in recent years

Overall AI VC funding grew at a CAGR of 49% from 2011-2016, and 2017 is currently at 172% of 2016 funding

AI Funding Over Time

Data through July 2017

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AI funding amounts are mostly early-stage events

AI Funding Amount By Round

63% of 2016 AI VC funding went into Series A and Series B events

Graphs shows only the funding rounds listed therein, data through July 2017

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AI startups founded in 2012 lead in VC funding

Startups founded in 2012 account for 26% of the sector funding over the last decade, and include companies like Tautiao, Improbable, and Mobvoi

AI Funding By Vintage Year

Data through July 2017

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AI startups are a global phenomenon

AI Startup Count by Country

Data through July 2017

10000

Companies

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A variety of traditional and corporate investors are making bets into AI

Selected Investor Activity in AI

The above count represents a subset of overall investor activity, data through July 2017

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Exits within the AI space have grown in the past few years

Exit events within the AI sector grew by 117% from 2013 to 2016, and 2017 is currently at 108% of the 2016 total

AI M&A and IPO Events By Year

Data through July 2017

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Quarterly Notable Events

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Recent AI funding statistics

There have been 115 AI funding events from April 2017 through June 2017

Recent AI Funding Round Counts

Graph shows only the funding types listed therein, data as of July 2017

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Recent AI funding events

Notable Recent AI Funding Events

Company Funding Type Amount Date

Series D $1,000,000,000 April 7, 2017

Series B $502,000,000 May 11, 2017

Private Equity $231,000,000 May 10, 2017

Series D $180,000,000 April 6, 2017

Series A $102,000,000 June 14, 2017

AI startups raised $3.5 billion from April 2017 through June 2017

Data as of July 2017

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Recent AI exit events

Notable Recent AI Exit Events

Company Acquirer Amount Date

$200,000,000 May 14, 2017

Unknown Jun 26, 2017

Unknown Jun 16, 2017

Unknown Jun 9, 2017

Unknown Jun 8, 2017

There have been 16 AI exits from from April 2017 through June 2017, including 13 acquisitions and 3 IPOs

Data as of July 2017

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