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European venture capital in-depth analysis of artificial intelligence: the stronger the stronger, China takes the lead

European venture capital in-depth analysis of artificial intelligence: the stronger the stronger, China takes the lead

recently, MMC ventures and Barclays Bank of England released the report "the state of AI 2019 - divergence", giving deep insight into the latest development of artificial intelligence

experimental steps Wang Wei

picture source: freedom

Author: Wang Wei

Artificial Intelligence (AI) is developing rapidly all over the world. Since John McCarthy put forward the concept of "artificial intelligence" at the summer conference of Dartmouth University in 1956, its development has already crossed the conceptual stage and gradually participated in our lives, bringing many conveniences. Artificial intelligence enables software to complete complex tasks more effectively through practice rather than following rules

the application of AI technology involves not only software, but also hardware. Customized chips are driving the development of a new generation of artificial intelligence hardware, while emerging software technologies - including reinforcement learning and transfer learning - are making breakthroughs in many fields and freeing system design from the limitations of past experience. New and generative AI technology will reshape media and society. It can be said that the ability of artificial intelligence has reached an inflection point

recently, MMC ventures, a British venture capital institution founded in 2000 and providing support to more than 50 high growth technology companies in the seed stage and round a, and Barclays in the United Kingdom jointly released the report the state of AI 2019 - divergence, giving deep insight into the latest development of artificial intelligence

why are the strong stronger and the weak weaker

why is China leading the world in AI application

why is the financing and valuation of European AI start-ups high

this report will tell you

differentiation appears

the rapid development of artificial intelligence has been pursued in all directions. In the past 12 months, the adoption rate of AI has tripled, bringing us the fastest possible paradigm shift in the history of science and Technology (that is, a fundamental change in the way we do things or think). However, it is worth noting that the greatly reduced heat transfer and the improvement of the application of AI technology have largely covered up the growing differences between AI leaders and laggards

leaders expand their advantages by deepening their learning and investment in AI technology. 80% of AI technology leaders said they understand the impact of AI on technology, business, workplace or industry; In contrast, less than 20% of AI technology laggards understand this

AI China is leading

globally, China is in a leading position in the adoption of AI technology, while the industry applying AI technology is uneven. The advantages of applying AI technology in China are mainly manifested in three aspects. The first is the availability of data, which is mainly because China has a looser policy than Europe in the use of personal data

on the other hand, there are few isolated data in Chinese enterprises. MIT Sloan Management Review pointed out that 78% of China's leading companies save data in a centralized data Lake (that is, a large data repository and processing engine), while the proportion of European and American companies doing so is 37% and 43% respectively

the third advantage is that Chinese enterprises usually have fewer legacy applications and processes, which provides an opportunity to surpass European and American enterprises with extensive existing systems and related integration requirements

it is not surprising that two of the above three reasons involve data, because the best AI algorithm is the one that can exclusively access high-quality data sets

the current situation of AI start-ups in Europe

considering that this is an AI analysis report written by European institutions, of course, it is necessary to analyze the AI start-up landscape in Europe. The report surveyed 2830 alleged AI start-ups in 13 European countries - Austria, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden and the United Kingdom. The combined GDP of these countries accounts for nearly 90% of the EU GDP

the survey found that only 60% of the companies, that is, nearly 1600 start-ups, have enough evidence to show that they have a value proposition in line with AI start-ups

Britain, France and Germany rank among the top three in the number of AI start-ups in Europe

there are deep-seated reasons behind this

since 2015, compared with traditional software companies, AI companies have obtained higher financing scale, and this trend runs through all stages from seed stage to round a, round B and round C

behind the high financing scale and high valuation of European AI start-ups

due to the industry fundamentals and the dynamics of capital supply and demand, early AI companies are attracting more financing. Given the long cycle required to realize the simplest feasible product (MVP), the high cost of AI talents and the large team required for deployment, it is reasonable for AI startups to require a larger investment scale

in addition to the fundamentals, the capital injection of AI start-ups is no longer raised by survival in the cracks due to the wide supply of funds and limited demand. Many venture capitalists hope to invest in AI, but there are relatively few AI companies that can be invested. Globally, venture capital investment in early AI companies has increased 15 times in five years, while the number of promising start-ups is limited. This reason also raised the valuation of AI start-ups. However, as AI entrepreneurship becomes the mainstream in the future, the momentum of high financing and high valuation is expected to weaken

driven by financing and valuation, it is not difficult for us to understand why start-ups want to label their businesses as artificial intelligence. This also reminds investors that it is particularly important to do due diligence before investing in start-ups that claim to use artificial intelligence

nearly 90% of European AI startups are engaged in B2B

among the 1600 European AI startups surveyed, 87% are B2B suppliers, developing and selling solutions for other companies; Only 13% engage in B2C business directly for consumers

87% of European AI start-ups are engaged in B2B, and 13% are engaged in B2C business

although most existing AI companies are engaged in B2B business, more and more newly established AI start-ups are engaged in B2C, and this proportion rose to one quarter in 2018

AI start-ups engaged in B2C business in Europe have shown an upward trend in the past three years

AI start-ups are the most popular in the fields of health care and finance

in Europe, AI start-ups provide high-quality services for the health care, finance, retail, media and entertainment industries. The high penetration of AI technology in these industries is partly because they can benefit from it, but also provide entrepreneurs with attractive business characteristics

nearly 40% of AI startups in Europe are concentrated in the field of health care and finance

while in Europe, health care has become the focus of AI entrepreneurship, and one fifth of AI startups focus on this section. As the name suggests, metal tensile testing machine is the equipment for routine mechanical property testing of metal materials or composites. In the next decade, developers will have a far-reaching impact on the health care industry even more than doctors. The UK not only owns nearly one-third of European AI start-ups, but also the core of European healthcare AI technology, which is closely related to the UK's high-quality higher education resources and government support policies

with core AI technology, you have everything

in the face of a large number of AI start-ups with a wide range of industries, which companies are the most competitive

in the final analysis, it is still those companies with core technologies - they are often core technology providers, such as automatic system development, computer vision, etc. Such companies have the advantage of developing "horizontal" and industry independent technology, rather than focusing on "vertical" solutions for individual industries or business functions. Although these core technology companies account for only one tenth of AI startups, they attract one fifth of venture capital

an AI start-up with core technology may grow into a "unicorn", but don't worry, a start-up with deep AI applications in the segmentation field is also likely to achieve great achievements

source: Yixin wealth

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