- US Artificial intelligent startups raked in $1.9 billion in venture capital money in Q1 2018, up 29% from the quarter before.
- AI accounted for 116 US deals, out of a total of 1,206 across tech sectors.
- AI accounted for three mega funding rounds — investments over $100 million — out of 34 across the US.
- Digital healthcare and cybersecurity also ranked alongside AI as the most notable Q1 funding trends.
Artificial intelligence startups in the US had a record quarter during the first three months of the year, raising $1.9 billion in venture capital across 116 deals, according to the 2018 Q1 MoneyTree Report published on Wednesday. That’s 29% growth from the previous quarter.
Digital healthcare companies, by contrast, raised $1.4 billion in Q1, while cybersecurity companies raised just $528 million.
AI’s strong Q1 numbers were underpinned by several mega deals in the space, including a $153 million series B for UiPath, a $112 million series A for Pony.ai, and a $100 million growth round for C3 IoT.
The flow of money into AI startups comes as sophisticated computing technologies such as machine learning, speech recognition and image recognition have graduated from the labs and made their way into the commercial market. Many of these AI-based products have the potential to upend major industries, from automobiles to retail.
All of the established tech giants — Google, Facebook, Amazon and Microsoft — are spending heavily to bolster their AI capabilities. But an explosion of small startups are also racing to develop new products and services that leverage artificial intelligence capabilities.
The AI startups come from Romania, China and Silicon Valley
Getty Images/Isaac Lawrence
UiPath is a Romania-grown and New York City-based “software robotics” company that uses AI to do digital busywork that humans don’t necessarily want to do. UiPath’s $153 million funding round, led by Accel Partners, capitalG and Kleiner Perkins Caufield & Byers, valued the startup at $1.1 billion, the company confirmed.
Pony.ai, a Fremont, California and China-based self-driving car startup, raised its $112 million from Comcast Ventures, Legend Capital and Sequoia Capital China.
C3 IoT, a Redwood City, California-based predictive analytics company, raised its $100 million from Sutter Hill Ventures, The Rise Fund and TPG Growth.
Those three mega funding rounds were among the 34 rounds over $100 million in the US in Q1, which accounted for 34% of the total VC funding over the quarter.
Two of the three largest funding rounds in AI were early stage, following the trend of 10% deal growth for investments of that stage.
Earlier seed stage investments in AI — used to get companies off the ground — accounted for just 26% of all funding rounds, down from 35% in the quarter before.
Across industries, funding for all US-based, VC-backed startups increased 4%, up to $21.1 billion across 1,206 deals in Q1. But that number is supported by the larger deals, as the total number of investments actually declined by 2% over the quarter.