From robots to chatbots, artificial intelligence is the flavour of the year for several tech giants and start-ups in India, and also globally.
However, AI start-ups received only about $30 million from investors in 2016, along with three exits, according to a report by Bengaluru-based research firm Tracxn.
There are about 200 AI companies in India, but only a few have raised a Series A round or higher, so far this year, it said.
Bengaluru-based Netradyne, which provides deep-learning-based computer vision for drone and automotive navigation, raised $16 million in its Series B round in June.
This year, the AI ecosystem also witnessed three exits — Hyderabad-based Tuplejump, a data mining and analysis platform, was acquired by Apple; and Freshdesk acquired social chat-room app Chat-mity and customer support chatbot Airwoot.
Most of the companies are in the pharma and healthcare, consumer robotics, autonomous driving, and enterprise security sectors.
The report further added that as tech giants endeavour to rebuild themselves around AI, M&A activity is on the rise — from 41 acquisitions in 2015, to 44 in the year to date. Google, Apple, Intel, IBM, and Salesforce made several buyouts of AI infrastructure companies this year globally.
Since 2009, the AI sector has witnessed rising YoY funding and founding activity, peaking in 2015, when $3.15 billion was invested in the sector, thanks to mammoth funding events such as Palantir’s $880 million in Series I round. In the first 10 months of 2016, investments in AI came up to around $2.7 billion, the report added.
AI appsFrom a funding perspective, AI applications ($11.5 billion) have attracted significantly more investments than AI infrastructure ($2.2 billion) businesses.
Five AI applications companies raised over $100 million this year, with three doing so at the Series A stage.