Interest in AI Startups Exploded in 2017

Artificial Intelligence (AI) technology startups seem to be in the news all the time. Is that hype, or are AI startups truly seeing major interest from investors? Using our research platform, we can conclude that interest in AI absolutely exploded in 2017.

We come to this conclusion from the following takeaways, each of which tracks a different metric for interest in AI startups:

  • AI funding grew exponentially in 2017
  • The number of AI deals is increasing
  • Investor interest in AI is growing

We’ll illustrate these takeaways with a series of graphs to show the extensive growth in AI.

AI Funding Grew Exponentially in 2017

Let’s start off by looking at AI funding trends over the past 6 years. Here is the annual amount of AI startup funding, stacked by quarters.

Q4 2017 AI Funding - Annual Funding

AI funding has been on an upward trend over these past few years, with a rapid explosion in 2017. Total funding in 2017 was over 3 times the size of 2016 funding. The Compound Annual Growth Rate (CAGR) in funding grew by a whopping 85% in the timeframe of interest (2012-2017).

This funding growth is substantial news on its own, but are there other metrics showing a growing interest in AI? Let’s see what the total number of deals looks like.

AI Deal Numbers Are Up Over 5 Years

The following graph shows us the annual number of AI startup funding deals, stacked by quarters.

Q4 2017 AI Funding - Annual Funding Count

Over the past five years, this graph shows an increased interest in AI via the number of deals in that startup ecosystem. Whereas the rapid growth in funding occurred in 2017, the rapid growth in deals occurred in 2014. The six-year CAGR on the number of deals stands at 23%. 2017 is also the highest year on record, beating the previous high in 2015 by around 2%.

So, we’ve seen that total funding and the number of deals are expanding, how about investor interest?

Investor Interest in AI is Growing

To gauge how investors are feeling, let’s look at the total number of AI investors who participated in each financing round. For example, if 5 investors participated in funding one company, and 4 investors participated in funding another, the total investor interest metric would be 9.

Q4 2017 AI Funding - Investor Participation

This graph clearly shows increased investor interest over the past few years. The six-year CAGR is 31%, and the 2017 total is 21% larger than in 2016 (the previous annual high-water mark).

Conclusion: Interest in AI is Exploding

In summary, we’ve seen significant growth in the total amount of AI funding. At the same time, the total number of AI funding deals has been steadily growing. Moreover, the investor interest in AI seems to be on a linear upward trend line. Taken together, we can say the AI sector is experiencing a rapid growth in interest over these past few years. It’ll be interesting to see if this trend continues into 2018, or if we travel into the “trough of disillusionment”.

What are your thoughts on this? Let us know in the comments section below.

To learn more about our complete Artificial Intelligence report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Artificial Intelligence Startup Highlights  – Q4 2017

Here is our Q4 2017 summary report on the AI startup sector. The following report includes an overview, recent activity, and a category deep dive.

To learn more about our complete AI research platform, visit us at http://www.venturescanner.com or contact us at info@venturescanner.com

Age by Category in Artificial Intelligence – Q3 2017

The following graph shows average and median age in the Artificial Intelligence sector. The graphic includes data through July 2017.

Artificial Intelligence Age by Category
Artificial Intelligence Age by Category

The above graph summarizes the average and median age of companies in each Artificial Intelligence category. The Speech to Speech Translation category has the highest average age at around 13 years, followed by the Speech Recognition category with an average age of 9 years. The Speech Recognition category also has the highest median age at around 8.5 years. Machine Learning Applications is the youngest category with an average age of 5 years and a median age of 4.5 years.

We are currently tracking 1965 Artificial Intelligence companies in 13 categories across 70 countries, with a total of $23.7 Billion in funding. Click here to learn more about the full Artificial Intelligence market report.

Where in the World Are Artificial Intelligence Startups? – Q3 2017

The analyses below summarize where Artificial Intelligence (AI) innovations are occurring. The graphics includes data through July 2017.

Artificial Intelligence Company Count by Country
Artificial Intelligence Company Count by Country

The above map shows the number of AI companies located in different countries. The United States ranks as the top country with over 1000 companies.

Artificial Intelligence VC Funding by Country
Artificial Intelligence VC Funding by Country

The above map shows the amount of total AI startup venture capital funding in different countries. The United States has the most VC funding at around $10B.

We are currently tracking 1951 AI companies in 13 categories across 70 countries, with a total of $23.3B in funding. Click here to learn more about the full Artificial Intelligence market report.

Artificial Intelligence Companies Founded by Year – Q3 2017

The following graph shows the founding year distribution in the Artificial Intelligence sector. The graphic includes data through July 2017.

Artificial Intelligence Companies Founded by Year
Artificial Intelligence Companies Founded by Year

The above graph summarizes the number of Artificial Intelligence companies founded in a certain year. 2014 ranks at the top with around 259 companies founded in that year alone. 2013 is the runner-up with 244 companies founded in that year.

We are currently tracking 1942 Artificial Intelligence companies in 13 categories across 70 countries, with a total of $23 Billion in funding. Click here to learn more about the full Artificial Intelligence market report.

Artificial Intelligence Funding Trends – Q3 2017

The following graphs highlight recent trends in Artificial Intelligence (AI) startup funding activity. The graphics include data through July 2017.

AI Q3 2017 Funding by Year

The above graph summarizes the total funding raised by AI startups for each year. 2017 has the most funding to date at just over $6B.

AI Q3 2017 Funding by Vintage Year

The above graph summarizes the total amount of funding raised by AI companies founded in a certain year. Companies founded in 2012 have raised the most funding around $4B.

We are currently tracking 1,931 AI companies in 13 categories across 70 countries, with a total of $22 Billion in funding. Click here to learn more about the full Artificial Intelligence market report.

Artificial Intelligence Funding by Round – Q3 2017

The following two graphs summarize the rounds of funding going into the Artificial Intelligence (AI) space. Please note these graphics are made using data through July 2017.

Artificial Intelligence Funding Amount by Round
Artificial Intelligence Funding Amount by Round

The graph above shows the total amount of VC funding broken out by round. From 2006 to 2016, we saw a general increase in the overall sector funding, with the total amount peaking in 2016. Earlier stage funding rounds (Series A, B, and C) made up most of the funding amount.

Artificial Intelligence Funding Count by Round
Artificial Intelligence Funding Count by Round

The graph above shows the total count of funding events broken out by round. From 2006 to 2016 we’ve seen a general upward trend that peaked in 2014 and 2015, and then declined slightly in 2016. Earlier stage funding such as Seed, Series A, and Series B events make up the majority of funding event counts.

We are currently tracking 1917 Artificial Intelligence companies in 13 categories across 70 countries, with a total of $21.5 Billion in funding. Click here to learn more about the full Artificial Intelligence market report.