AI startups raised USD73.4bn in total funding in 2020

According to data gathered by StockApps.com, the combined value of funds raised by AI startups jumped to USD73.4 billion in the fourth quarter of 2020, a USD15 billion increase since the beginning of the year.

Recent years have witnessed a surge of investments into AI startups. In 2015, the companies operating in this field raised USD2.8 billion, with the total funding value reaching USD5.5 billion by the end of the year, revealed the CrunchBase data.

Over the next twelve months, this figure jumped by USD7.1 billion to USD12.6 billion in cumulative funding. By the end of 2017, the cumulative funding value surged to USD21.3 billion, almost 290 per cent jump in two years.

The increasing number of investments continued in 2018, with AI startups raising USD16.6 billion in funding rounds that year. Statistics show that 2019 witnessed the strongest investment activity in the AI sector, with companies raising USD20.1 billion in funding rounds.

However, the Covid-19 pandemic changed that causing a slowdown in venture capital funding. The CrunchBase data showed AI startups raised USD4.4 billion in funding rounds in the first quarter of 2020, an 18 per cent drop year-over-year. The strong negative trend continued between April and June, with new investments plunging by 42 per cent YoY to USD3.5 billion.

In the third quarter of 2020, AI startups raised another USD4.6 billion, almost 10 per cent drop YoY, with the cumulative value of investments reaching USD70.5 billion. Statistics show AI startups raised a total of USD12.5 billion in funding rounds between January and September, or 25 per cent less than in the same period a year ago.

Analysed by geography, North America represents the leading region with USD39.5 billion worth of investments in artificial intelligence startups. The US companies raised more than 95 per cent of that amount, with California, San Francisco, and New York as the leading hubs.

Statistics show Asian companies raised USD25.2 billion in funding rounds, ranking as the second-leading region globally. European AI startups follow with USD8.1 billion worth of investments so far.

Last week, the US robotics company, Nuro, announced it had raised a USD500 million in Series C funding round, the biggest investment in 2020. This brings the total amount raised by the autonomous delivery vehicles producer to USD1.5 billion.

Last month, an American-Chinese biotech firm that focuses on AI-assisted drug discovery, XtalPi, raised USD319 million in Series C funding led by SoftBank Vision Fund, the second-largest investment this year. XtalPi works with pharmaceutical giants like Pfizer, supporting them to identify promising new drug-like molecules.

Statistics show that Zymergen`s USD300 million worth Series D funding round represents the third-largest investment in 2020. The US biotechnology company specialised in machine learning, big data, and artificial intelligence will use the funds to speed-up the manufacturing of its first commercially available product Hyaline, a revolutionary bio-generated specialty film in the polyimide family.