YoY deal activity into the perceptual computing category which ranges from voice control and facial recognition to emotion tracking and biometrics grew 41%.
From an iPad app that understands your conversations to an image recognition API turning photos into data, a new wave of venture-backed companies has emerged in a category broadly known as perceptual computing. And venture capital investors are paying attention. Earlier this month, Intel Capital announced the creation of a $100M Experiences and Perceptual Computing Fund. And Highland Capital Partners has set aside $25M to invest in startups utilizing Leap Motion’s motion-sensing technology.
The perceptual computing space can be divided into five major sub-categories as described below:
Emotion Sensing – Companies that provide technologies to detect, measure and understand emotional signals. Examples include Affectiva and Beyond Verbal Communications.
Visual Recognition – Companies specializing in tools to identify and analyze objects based on their visual attributes. This includes companies such as Digital Signal Corporation and IQ Engines.
Biometrics -Companies that offer technologies to identify and collect data based on behavioral or physiological characteristics and traits. This includes companies such as AOptix Technologies and OMsignal.
Voice and Speech Recognition – Companies that develop products based on the ability to identify words and phrases into a digital format, which include companies such as Vestec and Voci Technologies.
Gestural Control – Companies that enable the use of gestures to control and manage a variety of applications and devices. Examples include Leap Motion and PrimeSense.
Over the last year (through Q1’13), venture capital investors have poured $182M into 52 pereceptual computing deals. This represents a 41% increase in YoY deal growth. Among the larger deals were AOptix’s $42M Series E round and Affectiva’s $12M Series C financing from investors including Kleiner Perkins Caufield & Byers and Li Ka-shing’s Horizons Ventures.
The immaturity of the perceptual computing space is illustrated in the graphic below, which shows over 65% of deal activity in the past two years occurring at the Seed/Angel and Series A stages.
Just 16% of perceptual computing deal activity in the last two years took place in Silicon Valley. Instead, venture-backed perceptual computing companies see considerable growth outside of major U.S. tech hubs, including a strong presence of startups based in Israel such as Cortica, EyeSight Mobile Technologies and Omek Interactive.