Venture AI: Which Startups Do Investors Choose?

In recent years, the number of startups using artificial intelligence and other cutting-edge technologies has skyrocketed. As a result, venture funding and investments in these startups hit historic records year after year. Despite slow venture capital deals due to the COVID-19 crisis this year, interest in AI funding continues to grow.

According to CB Insights, from 2014 to the second quarter of 2020, the size of global investments was $94.3 billion. Most venture capitalists fund startups in the fields of healthcare, finance, retail and autonomous driving.

Experts from the software development outsourcing company Boosty Labs suggest taking a look at startups from these industries that have raised the most investments.

Finance And Insurance

Traditionally, investors have been actively investing in the finance and insurance sector. This can be explained by the fact that financial data is initially well structured and algorithms do a good job of analyzing it. On the other hand, digitalization and the number of electronic financial transactions are growing exponentially. As a result, fraudulent risks increase.

So, investors first of all pay attention to startups with anti-fraud products. The British company Featurespace, which develops an anti-fraud system, has raised $73 million in investment. They developed an adaptive behavioral analysis algorithm that recognizes fraudulent patterns.

Another UK company that develops KYC and anti-money laundering software based on artificial intelligence is ComplyAdvantage. The company's goal is to develop a product that can prevent money laundering, terrorist financing, corruption and other financial crimes. Investors have already invested $38 million in ComplyAdvantage.

Health Care

During a pandemic, the issue of financing startups that operate in the healthcare sector has become particularly relevant.

San Francisco-based startup Atomwise, which uses artificial intelligence to drive drug discovery, has raised $175 million in venture capital funding. The company plans to use the new funds to help further expand its largest portfolio of AI drug discovery in history and expand its portfolio of over $5 billion in low molecular weight drug discovery deals.

Salt Lake City, USA-based company Recursion Pharmaceuticals is focused on digital biology and is building a machine learning platform. The startup combines experimental biology, automation and artificial intelligence to quickly and efficiently identify treatments for any disease that can be modeled at the cellular level. Recursion Pharmaceuticals is using technology to map human cell biology that will change the pace and scale, and new treatments will benefit patients. The company was founded in 2013 and has raised $465 million in investments to date.

Autonomous Driving

Over the past seven years, autonomous driving has gone from “perhaps possible” to “definitely possible” and “inevitable”. Investors have high hopes for unmanned technologies and believe that they will solve many problems in the commercial transport of goods.

For example, investors put their trust in startup Aurora, which has set itself the goal of solving one of the most difficult challenges of our generation: to change the way people and goods move. The company is working to create a transportation ecosystem of the future that will bring together automakers, mobility services, logistics and self-driving car fleet management. The startup raised $690 million in investments.

San Diego-based American startup TuSimple, a self-driving truck manufacturer, raised $299 million in eight rounds. The company was founded in 2015 and is developing a ready-to-market Level 4 Autonomous Driving (SAE) system for the logistics industry. TuSimple trucks are the first and only trucks capable of independently moving from depot to depot.

Retail & eCommerce

Nowadays, e-commerce has become a more saturated and competitive industry. Artificial intelligence has proven to be able to make the industry smarter and more structured, where startups have contributed a lot.

Californian startup Faire, which develops a marketplace for wholesale sales, has raised $266 million in four years of operation. The company is developing a platform that helps retailers find and buy unique items for their stores. Faire offers business owners a suite of simple technologies, analytics, financial terms and logistics solutions to support local retail.

Another San Francisco-based startup, Standard Cognition uses artificial intelligence to allow shoppers to scan in-store items with their smartphones and pay for purchases without a cashier. The platform is available to any retailer. The solution helps to reduce labor costs, improve customer service and increase profit margins. It also helps smaller retailers compete with larger chains and online marketplaces. Standard Cognition was founded in 2017 and has raised  86 million in investment.

Artificial intelligence has proven itself well in many industries, and the active support of startups from investors is not accidental. This is not a hype that came out of nowhere, but a long-term trend that has been observed over the past decade. It is possible that most startups and their products will never become successful market players, but there is no doubt that their ideas and developments will form the basis of something big and truly revolutionary.