As we’ve mentioned, corporate giants in tech are competing to acquire private artificial intelligence startups, with Google emerging as the most active acquirer over the last 5 years. So far in 2016, there have already been over 20 acquisitions of AI startups, the most recent being Twitter’s acquisition of visual-processing startup Magic Pony Technology.
We analyzed M&A and IPO activity in this space from 2011. Our artificial intelligence category includes companies developing core AI algorithms as well as those applying AI solutions to specific industries like healthcare and cybersecurity.
Startups acquired at early years of fundraising
We used our database to analyze at what stage the AI companies exited. Most of the startups were acquired within 4 years of initial funding, as seen in the graph below. To name a few, Vocal IQ, a spin-out from the University of Cambridge, raised a seed round in June 2014 and was acquired in 2015 by Apple; AI-based messaging startup Emu was acquired by Google within a year of seed funding; Wit.ai was acquired by Facebook in 2015 after the startup raised two seed rounds the previous year; Salesforce acquired Series A stage smart-calendar startup Tempo AI last year.
The outlier late-stage exit in the graph below (14 years after first funding) is Nexidia’s acquisitions by NICE Systems.
M&A activity up 7x
M&A activity was up from just 5 transactions in 2011 to over 35 in 2015. Google, IBM and Apple made 2 acquisitions each last year. Amazon and Salesforce joined the race with the acquisition of Orbeus and Tempo AI, respectively.
Most active acquirers
Apple and Salesforce joined the race last year and have acquired 3 AI-focused startups each since then.
Our research brief detailing the timeline of major acquisitions shows how the race is heating up among the top acquirers listed below.
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:
- Earnings Transcripts Search Engine & Analytics to get an information edge on competitors’ and incumbents’ strategies
- Patent Analytics to see where innovation is happening next
- Company Mosaic Scores to evaluate startup health, based on our National Science Foundation-backed algorithm
- Business Relationships to quickly see a company’s competitors, partners, and more
- Market Sizing Tools to visualize market growth and spot the next big opportunity