After four straight years of growth, venture funding for artificial intelligence rose sharply in 2018 to hit $9.3B.
While the total number of VC-backed AI deals in the US fell in 2018 — down 13% from the year before — funding in the space nearly doubled over the same period.
VC funding into US artificial intelligence startups grew 72% year-over-year, hitting over $9.3B.
One potential driver behind this jump is a significant increase in expansion-stage deals. From Q1’18 to Q4’18, expansion-stage activity increased as a percentage of all AI fundraising from 19% to 32%.
At the same time, seed-stage activity dipped, falling from an 8-quarter high of 44% in Q3’17 to just 28% in Q4’18.
This shift could be an early indication that funding in the AI space is transitioning from more exploratory seed-stage rounds to larger, more growth-oriented rounds for mature companies.
The vast majority of AI deal activity took place in California, which saw 53 deals totaling $1.9B.
In second place was Massachusetts, with 13 deals worth $247M — including Boston-based DataRobot’s $100M late-stage mega-round, which was backed by DFJ Growth Fund, Intel Capital, and New Enterprise Associates.
If the AI seedlings that investors planted between 2013 and 2017 continue to mature — and to demand increasingly large amounts of capital — it’s likely that this increased level of late-stage AI funding will also continue, if not increase.
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
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