A large number of artificial intelligent startups enter IPO? Do you see the huge trading market?

In the view of venture capitalists, the startup of the artificial intelligence is already time to enter the open market, and they have made more, larger, and earlier. For artificial intelligence startup, it is now a good time to raise funds. Although many of the financing records of the startups have risen in 2021, the more powerful and intelligent startups, which seems to have a broader customer demand, including more young and very long investors.

The frontier data from CB Insights describes in detail a global artificial intelligent financing market that is active. Of course, market financing may be slightly different in different regions. For these data, the AppHire Ventures Partner Jai Das and Glasswing Venture Partner Rudina Sseri conducted deep-depth research and analysis, further clarifying the flow of funds and development prospects in today’s artificial intelligent entrepreneurial market.

Record of transactions

The report of CB Insights shows that in the third quarter of 2021, investors have invested $ 17.9 billion to the world’s artificial intelligent startup. Since the first quarter of 2020, the financing amount of these enterprises has risen in quarterly. The artificial intelligent startup of the initiative is 6.3 billion US dollars, frequent transactions and recorded transactions have prompted these companies to usher in. Dramatic performance growth.

The total risk investment in the start-up industry has continued to rise in more large-scale huge round finance and billion or even more investment amounts, and the artificial intelligent entrepreneurial market is no exception. In the third quarter of 2021, a total of 45 super round financing was obtained in the third quarter of 2021. This is a huge financing of 45 or more in three consecutive quarters. In the first quarter of 2021 and the second quarter, 47 and 46 financing transactions were obtained separately.

The large trading amount shows the super round growth rate of artificial intelligent entrepreneurial companies, which is compared to how different years ago. According to CB Insights’s data and TechCrunch measurement, in 2020, an average of 19.75 huge transactions were obtained per quarter in the field of artificial intelligence. In 2019, this figure is only 13.5 per quarter, 12.25 in 2018, 2017 is only 6.

It is worth noting that accompanying time’s transition and growth of medium-term investment, the early stage of transactions is currently declining compared to the transaction share of the entire artificial intelligence startup. In 2020, early artificial intelligent investment accounted for 65% of total transactions, while medium-term transactions accounted for 20%. By 2021, this number is 61% and 22%, respectively; in 2020, there are 2,412 rounds of A1 round financing in the artificial intelligence field, including 2,073 rounds of financing in the third quarter. From this investment trend, it is foreseeable that the total investment volume of human intelligent industry in 2021 will continue to rise, compared to early transactions, the medium and long-term investment amount will have a new high.

In fact, in the financing of artificial intelligence, the oversized financing has fallen to 70% peak in the first quarter of 2021, fell to 57% in the third quarter. Early and mid-term artificial intelligent entrepreneurial companies are also expanding. The average transaction scale of artificial intelligence startup has increased from $ 18 million in 2020 to $ 3.3 million this year. Considering that the average data may have deviation due to some big transactions, we are more concerned with the median of the transaction size, which is also accelerating growth, which has increased from $ 5 million in 2020 to 700 to date. Wan Dollars, the increase is about 40%. More specifically, to the third quarter of 2021, the annuality of the angel wheel is a median of $ 6 million, above 2020 US $ 4 million.

These data seem to help us associate, a batch of startups are growing at high speed, busy solving a scene of another technical issue. Glasswing’s investors SSERI believes that although companies have become more extensive in recent years in recent years, artificial intelligence and machine learning products are also welcoming and challenge in various fields, which will further promote market demand. It also puts forward higher requirements for integrated operations from sales and marketing to cyber security.

Creating a wider range of customer bases and more advanced applications means that startup needs to invest a lot of money. Combined with data, we can draw the following conclusions:

  • The huge trading of artificially intelligent startups is constantly accelerating, which means that the initial company group is born more than ever. Most of these companies will need funds to drive their own exit, rather than seeking enterprises soft landing.
  • From the rising trading value, the transaction volume can be seen that the early financing market of artificial intelligence startups is strong, and the expansion of the medium-term transaction share should give post-investment to sufficient reserves. In a foreseeable future, this will also make the IPO of artificially intelligent startups continue to rise.

Of course, at the same time we also need to admit that all artificial intelligence startups we have focused can reach expectations with the above.

Artificial intelligence is everywhere

Although we are more interested in future technologies and cutting-edge artificial intelligence, many of these companies are actually handling more monotonous tasks every day. Of course, this will not cut the enthusiasm of the wind. Sapphire Ventures Investors DAS is very optimistic about these "bored artificial intelligence", which are used to solve many simple problems. As an example, the company is providing transcription and subtitle services that rely on artificial intelligence, and has been committed to "humanized" management, and maximize the accuracy of work.

Standing in sapphire’s pragmatic perspective, it does not oppose human cooperation with the machine, which is known through its attitude toward Verbit and some healthcare companies. DAS believes that "artificial intelligence will not replace human beings, but will make humans do better at work. Artificial intelligence is outbreak out in all fields, I think any development software will have built-in artificial intelligence."

It is because of artificial intelligence becomes universal in people’s lives, and it is easier to create an artificial intelligent startup or investment. "In the past few years, the market gauge has been significantly reduced," Glasswing’s investor Sseri said, "AI / ML is no longer simple in depth technology, it takes two or three years to realize business feasibility." She It also tries to explain this with the extensive model (Openai’s language generator GPT-3), template and powerful open source community, trying to explain this, in her opinion, "startup can use them to generate innovative solutions."

At the same time, SSERI added that accompanying artificial intelligence has increasingly significant added value, people’s demand is increasing, "company, especially enterprises, have been put in their data infrastructure and practice More and more funds, they can now get huge profits now. As the value of the bottom line tends to be clear, suppliers with cutting-edge, high-value innovation technology may require the improvement of the product service price. "

This is also reflected in the supply and demand resonance map proposed by the venture capital company PI Ventures, and the value of artificial intelligence has a significant change in the two axes in the figure: as the technology is simpler, the supply of artificial intelligence is increased; As demand increases, the previous potential demand is now "surface".

From the perspective of venture capital, the results are obvious: "More entrepreneurs can enter this area, prove the attraction of the industry, and get more funds from investors. But if you are the founder, don’t expect The interests of investors have been fair allocation, at least yet now, "SESESERI said.

Geographical dilemma

When we study the flow of artificial intelligent funds, the situation will become uncertain when it is specifically areaful. Taking the United States as an example, in the third quarter of 2021, the American artificially intelligent startup company received $ 10.4 billion in investment, a total of 324 transactions. In Asia, the total financing of these 321 similar transactions is only $ 4.8 billion. The Europe is less, and it only has a value of 1.6 billion US dollars from artificial intelligence starting funds from 142 transactions. There are also Latin America, with only 12 transactions, worth $ 500 million. In fact, Canada won 24 rounds of financing in the third quarter, achieving $ 400 million in capital flow, and its artificial intelligent risk investment amount, almost all venture capital acquired in Latin America.

In contrast, it is not difficult to conclusion. If the startup of the initial company wants to raise labor intelligence funds, it must be established in North America, Asia or Europe, and the other markets are not active. Of course, if an early trading leads to a small market that has been born in a small market, the current situation may change.

Many times, we will see similar intergenerational differences in various entrepreneurial markets. North America, Asia and Europe may be farther in certain areas such as financial technology, which promotes the efficient solution of startups to a series of issues.

In contrast, emerging markets in developing countries such as Latin America and Africa have emerged in huge financial science and technology investments in recent years, which may be because of their average economic levels, and there is less interference from financial ecosystems. If this status is true, we should see that the number of financing numbers in Latin America and Africa in the next few years will rise.