We recently released our flagship report, The Deal, which analyses equity finance trends in the UK since 2011. We’ve closely analysed every deal, providing a full picture of this form of business finance in the UK. When we split these deals by certain sectors, it becomes clear where investors are betting they’ll see high returns in the future. One of those sectors is artificial intelligence, whereby self-learning software is being used to improve various business processes. In this post, we highlight the UK’s top AI startups by the amount of equity finance they’ve raised.
The UK’s Top AI Startups (by equity finance funding)
In the last megadeal of 2018, a Bristol-based startup known as Graphcore secured $200m from a consortium of leading investors, including the corporate venturing arms of Bosch and Microsoft, and VC giant Sequoia Capital.
What specifically does Graphcore produce, to warrant such attention? Bucking the broader “software is eating the world” trend, Graphcore develops hardware. Namely, new computer processors, known as Intelligent Processor Units (IPUs), which have been specifically designed to handle the tasks demanded by machine learning applications. Think of them as computer processors for a new age of artificial intelligence. Or, more basically, the hardware that can run AI software.
Sales at this fast-growing startup expanded rapidly to £30m in 2017, and the following year they were given a $1b+ valuation by private equity heavyweights KKR.
Indeed, they represent the UK’s fastest yet startup-to-unicorn story arc, receiving the valuation just two years after they incorporated in 2013. It could well be that this was an optimistic valuation, given the company’s age. However, growth has maintained strong – in 2018, the company was valued at £1.4b, meaning their value had nearly doubled in the three preceding years.
However, whereas Darktrace uses this to detect potential security threats, Behavox is designed (in slightly Orwellian terms) to help a firm’s management fully optimise the behaviour of their employees. Indeed, BehavoxCompliance is able to sift through a firm’s past phone calls, recognising key words relating to compliance in the finance industry, and allowing firms to more easily assess any compliance breaches.
However, the racing cars in Roborace are all self-driving and electric-powered. Their racing class allows different brands to test out their automation development talents. In a world where artificial intelligence and robotics has come to symbolise a pillar of human innovation, winning a Roborace could be a prestigious accolade for any interested company.
Roborace is the UK’s second best funded robotics startup, after CMR Surgical.
AI is used to create an artificial symptom checker, which can then assign you the most efficient treatment (be that an online consultation with a doctor or just to wait and see if symptoms resolve themselves).
This helps companies discern between genuine customers and potential fraud attacks. For instance, this can used by fraud analysts in banks to visualise the online behaviour and actions of a customer between different sessions, helping to identify where fraudulent activity has taken place.
Their backers include some of the UK’s leading spinout investors, such as IP Group, and a range of local Cambridge investors.
Tessian develops a similar set of cybersecurity tools to Darktrace but has designed them specifically for email communication, identifying when suspicious behaviour is taking place in an employee’s email account.
Backers include Accel Partners and Balderton Capital.
Uniquely in the UK’s AI ecosystem, ComplyAdvantage operates in the world of financial crime, operating a database of individuals and organisations thought to have undertaken illegal activities such as money laundering, or financing terrorist organisations.
CA’s machine learning algorithm helps businesses quickly identify risks amongst their clientbase, improving their process for complying with relevant financial crime regulations. Backers include two of the UK’s leading venture capital funds – Index Ventures and Balderton Capital.
Patsnap has developed a web-based portal, which uses machine learning to help users access a wide range of information on intellectual property patents, such as the owner, expiry and renewal dates, and details of past litigation cases.
This sounds like it could become a vital tool for all those operating in the IP sector, from investors such as IP Group, to lawyers specialising in patents and intellectual property. Interestingly, Patsnap has also been backed by Sequoia Capital, one of the world’s biggest, and most prestigious venture capital funds.