Global VC funding in AI startups hits record high of $9.3b in 2018

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Artificial intelligence was a no-brainer bet for humans in 2018. Venture capital funding of AI companies soared 72 percent last year, hitting a record $9.3 billion, according to a new report from PwC and CB Insights.

The surge comes after three years of steadily increasing investment, with the average annual increase from 2015 to 2017 at 28 percent. The recent boost partly reflects the frothy funding environment overall: venture investing in the U.S. hit $99.5 billion in 2018, the highest level since 2000.

It also indicates larger excitement around the industry. College students last year enrolled in introductory AI and machine learning classes in record numbers, the number of academic papers on the topic shot up and officials mentioned the technology in more than 70 meetings of the U.S. Congress, according to Stanford University analysis of transcripts.

AI technology has matured in recent years, as more companies have started using predictive algorithms and other automated techniques across myriad disciplines. In the fourth quarter, the largest AI deal in the U.S. was a $400 million funding round raised by synthetic biology startup Zymergen Inc. Zymergen uses AI-powered robots to genetically engineer microbes to create new materials like flexible glass and improve existing ones like paint that resists radar detection.

The largest deal in AI in the U.S. for all of 2018 was self-driving car startup Zoox Inc.’s $500 million funding round. And even that was dwarfed overseas by the $600 million investors plowed into Beijing-based SenseTime Group Ltd. SenseTime sells software that recognizes people and objects, and with a $4.5 billion valuation, is the world’s most valuable AI startup.

But the growth hasn’t been distributed evenly. For the first time since at least 2013, the number of deals in AI decreased, even as total money invested surged — an indication that investors are beginning to concentrate their bets on the companies they see as the winners. The trend toward selectivity was especially pronounced in seed-stage startups, with seed-stage deals falling from 39 percent of total deals in 2017 to just 30 percent in 2018.

“There’s big overcrowding at the seed stage,” said CB Insights intelligence analyst Mike Wholey. “It’s gotten really easy with open-source products to start an AI company.”

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.