Cloud Developers are Using the Programmable Infrastructure to Open a World of Innovation and Business Transformation

Cloud Developers are Using the Programmable Infrastructure to Open a World of Innovation and Business Transformation

In the past few years, we have seen a surge of advancement in cloud development. New platforms, developer tools, and cloud services have become available, and developers have responded by building innovative cloud-based applications, services, and businesses. In my opinion, we’ve only unleashed the beginning
Five Reasons Why Machine Learning Needs To Make Resumes Obsolete

Five Reasons Why Machine Learning Needs To Make Resumes Obsolete

Machine Learning Needs To Make Resumes Obsolete Hiring companies nationwide miss out on 50% or more of qualified candidates and tech firms incorrectly classify up 80% of candidates due to inaccuracies and shortcomings of existing Applicant Tracking Systems (ATS), illustrating how faulty these systems are

CONTRIBUTORS

What’s Next In Cloud And Data Security?

What’s Next In Cloud And Data Security?

Cloud and Data Security It has been a tumultuous year in data privacy to say the least – we’ve had ...
Could Your Business Survive?

Could Your Business Survive If Your Office Space Didn’t?

Could Your Business Survive? Hurricane season is upon us once more. With the Pacific season starting back in April and ...
The Five Rules of Security and Compliance in the Public Cloud Era

The Five Rules of Security and Compliance in the Public Cloud Era

Security and Compliance  With technology at the heart of businesses today, IT systems and data are being targeted by criminals, ...

RECENT NEWS

Pressure grows on Zuckerberg to attend Facebook committee hearing

Pressure grows on Zuckerberg to attend Facebook committee hearing

Australia, Argentina and Ireland join UK and Canada in urging Facebook CEO to give evidence to parliaments Parliamentary committees from ...
Oracle Cloud Unveils New HPC Offerings to Support Mission Critical Workloads

Oracle Cloud Unveils New HPC Offerings to Support Mission Critical Workloads

Oracle Cloud Unveils New HPC Offering Oracle now provides a complete set of solutions for any high performance computing workload, ...
The New Industrial Revolution – According to the WSJ

The New Industrial Revolution – According to the WSJ

The insert in today’s US print edition of the Wall Street Journal is called The New Industrial Revolution. The paper updates ...
Capgemini in Gartner Magic Quadrant

Capgemini in Gartner Magic Quadrant

Paris, November 9, 2018 – Capgemini, today announced that Capgemini (Prosodie) has been positioned as a Leader by Gartner in its ...
Alibaba's on-demand online services unit valued at $30 billion: sources

Alibaba’s on-demand online services unit valued at $30 billion: sources

HONG KONG (Reuters) - Alibaba Group’s newly formed on-demand online services unit has rocketed in value to as much as ...
Record Number of VC Funds Target AI

AI Startup Funding Part II: Record Number of VC Funds Target AI

Record Number of VC Funds Target AI

Roughly 550 startups whose core activity is artificial intelligence attracted over $5 billion in venture capital funding in 2016, a report by CB Insights reads. It appears that AI startups will receive the lion’s share of VC funding in the next years judging by the rate of growth of VC financing in this tech industry segment. During the time of 2012 to 2016, the number of deals rose from 160 to 658 a year while funding hit a record high of $5.02 billion last year as compared to just $589 million in 2012.

Funding AI

(Image Source: CB Insights)

The chance is good that if you are an AI startup backed by an accelerator or incubator, you are looking for VC funding and eventual IPO as well. VC investors are more than willing to pour their money into promising AI and machine learning companies and there are funds specializing even in backing startups that already enjoy growing customer base and have firmly set their foot in the market.

Corporate VC Funds Trail Other Investors

It also appears that AI-focused venture capital investors have higher risk tolerance compared to other VC funds which are already more selective when investing in tech startups. Nonetheless, every large company seems to have set aside funds to invest in AI – from Toyota to Google to Salesforce among many others. On the other hand, the most active VC investors are not exactly funds set up by large corporations but VC vehicles that specialize in innovative tech. Facebook and Microsoft, for example are not on the list of the most active investors in AI through their respective VC funds.

MOST ACTIVE VC INVESTORS 2012-2016 (Excluding robotics and AR/VR)

Rank

Investor

1

Data Collective

2

Intel Capital

3

Khosla Ventures

4

New Enterprise Associates

5

Google Ventures

6

Andreessen Horowitz

7

Accel Partners

8

SV Angel

9

Plug and Play Ventures

10

Slack Fund

11

Horizons Ventures

12

General Catalyst Partners

13

Norwest Venture Partners

14

Bessemer Venture Partners

15

First Round Capital

16

500 Startups

17

Bloomberg Beta

18

FundersClub

(Source: CB Insights)

Machine learning technologies, smart robots, natural language processing, and computer vision platforms attract most of the total VC funding for companies working in the AI field. Other promising technologies in which VC funds are investing include recommendation engines, virtual assistants, computer vision apps, speech recognition, and gesture control. Categories such as context aware computing, video content recognition, and speech-to-speech translation get the smallest portion of investments.

(Image Source: Venture Scanner)

The Average AI Fund Has Dozens of Startups on Its Portfolio

Let’s return to the most active VC investors in AI.

  • Data Collective has a portfolio comprising over 160 companies.
  • Intel Capital currently invests in some 38 companies working in the field of AI.
  • Khosla Ventures have a diversified portfolio covering various tech categories.
  • New Enterprise Associates boasts active portfolio of over 300 growing businesses in the technology and healthcare sectors. Over 210 NEA-backed companies have gone public.
  • Google Ventures have invested in nine AI startups so far with Cloudera being the most prominent one.
  • Andreessen Horowitz invests in companies covering the entire spectrum of innovative technologies, AI including.
  • Accel Partners have invested in some five AI companies but the number will grow over time.
  • SV Angel have not disclosed their portfolio on their official site.
  • Slack Fund. Once a startup themselves, Slack now run a fund designed to support teams building products on top of Slack.
  • Plug and Play Ventures is investing from $25,000 to $500,000 into over 100 ground-breaking companies every year.
  • Horizons Ventures have invested in a total of 81 companies, some of them AI startups.
  • General Catalyst Partners have managed to date some $3.75 billion in funds invested through eight investment vehicles.
  • Norwest Venture Partners have about 110 active tech companies on their portfolio.
  • Bessemer Venture Partners are investing amounts ranging from $100,000 to $75 million in innovative companies. Some 117 startups backed by BVP have placed an IPO.
  • First Round Capital usually invest from $500,000 to $750,000 in a single startup while their follow-on capital makes 74 percent of the total investment funds at their disposal.
  • 500 Startups will provide $150,000 in seed funding in exchange for 6% of equity.
  • Bloomberg Beta have $150 million under management through two investment funds amounting to $75 million each.
  • FundersClub have invested in about 260 startups with their portfolio being valued at over $7 billion.

As we’ve discussed, these are some of most active VC investors in AI at the moment. However, many other VC funds are eager to invest in your AI startup whether at an early stage or as growth funding.

The last article of this AI funding series will discuss whether you really need VC or accelerator backing to nurture an AI startup. Bootstrapping is a viable option especially when complemented by some underrated resources that can help you grow your startup.

By Kiril V. Kirilov

Kiril Kirilov

Kiril V. Kirilov is a content strategist and writer who is analyzing the intersection of business and IT for nearly two decades. Some of the topics he covers include SaaS, cloud computing, artificial intelligence, machine learning, IT startup funding, autonomous vehicles and all things technology. He is also an author of a book about the future of AI and BIg Data in marketing.

Cloud Community Supporters

(ISC)²
Cisco
SAP
CA Technologies
Dropbox

Cloud community support comes from (paid) sponsorship or (no cost) collaborative network partnership initiatives.