For this quarter’s funding analysis, let’s examine how average funding event sizes in the artificial intelligence (AI) sector are evolving. The graphic below shows the AI average funding event size over time by quarter.
As the graphic demonstrates, AI average funding event size in Q1 2019 was at $35M. This is an increase of 75% from the $20M in Q1 2018. The average funding size has been on a robust upward trend, with the average funding size last quarter around 3 times larger than it was 5 years ago. The top three funding events in Q1 2019 include a $940M round from Nuro, a $600M round from Horizon Robotics, and a $530M round from Aurora.
The artificial intelligence (AI) industry has seen $50B in total all time funding. Let’s analyze the investors making bets into AI and identify the most active firms.
The graphic below shows AI investors based on their number of investments into the sector. If an investor participates in two investment rounds in the same company (such as a Series A and Series B), that would qualify as two investments for this graphic.
As the graphic demonstrates, Y Combinator has made the most bets in the AI sector with 75 investments. New Enterprise Associates follows in second place with 64 investments. Examples of companies Y Combinator invested in include Vicarious, Sift Science, Atomwise, and Standard Cognition. Let’s see which investors make their way onto this list in 2019!
Now that 2018 is complete, let’s see how exit activity for artificial intelligence (AI) compares to previous years. The graphic below shows the total annual AI exit events over time.
As the graphic demonstrates, 2018 saw a drop in AI exit activity compared to the previous year. The 58 exit events in 2018 represent a 22% decrease from the 74 exit events in 2017, which was the highest year on record for exit activity. However, AI exits are still on a general upward trend, with a 5-year CAGR of 24% from 2013 to 2018. Let’s see if the AI exit activity in 2019 will jump back up to the 2017 level.
With 2018 now behind us, let’s examine how artificial intelligence (AI) funding compares to previous years. The graphic below shows the total annual AI funding amounts over time.
As the graphic demonstrates, 2018 experienced the highest AI funding on record at $18B. It represents a 24% increase from the previous year’s funding. In addition, AI funding grew at a CAGR of 62% from 2013 to 2018. It’ll be interesting to observe if the funding growth will remain strong in the new year.