Healthcare is one of the strongest industries for Artificial Intelligence Startups in 2016

Source : CB Insights

Healthcare , advertising, sales & marketing, and business intelligence startups using AI technologies received the highest number of deals in 2015 compared to other sub-industries; healthcare is dominating 2016 so far.

In the past year, Google open-sourced its machine learning API tensorflow and Nervana Systems open sourced its deep learning software. Several sub-industries are leveraging the advances in artificial intelligence algorithms, from predicting crop failures in agriculture to intelligent shopping assistants in e-commerce.

Particularly, healthcare startups using advanced machine learning algorithms for medical imaging & diagnostics, remote patient monitoring, and risk prediction, among other things, have piqued the interest of investors in recent years. Deals to these startups increased from 8 in 2011 to 60 in 2015. There have already been over 40 deals to this sub-industry so far this year (as of 6/15/2016). A list of some of these startups can be found in our AI in healthcare market map.

Applications of artificial intelligence in advertising, sales and marketing received the second highest number of deals in the last five years. Brands are using machine learning for cross-devise advertising and online customer behavior studies, among other things. Here’s a list 13 high-momentum companies to watch in this category.

We analyzed equity deals to the top 11 AI verticals in the heat map below:

Here are some funding highlights:

·         AI in healthcare accounted for 15% of all equity deals to artificial intelligence startups in 2015. Smart money VCs have backed companies including Lumiata, SigTuple, Deep Genomics and twoXAR.

·         The personal assistants/productivity category includes scheduling assistants, chatbots for teams, and bots assisting with tasks like finding the nearest restaurant to eat. It does not include industry-specific bots like Mezi, which is categorized under e-commerce. This area picked up in 2015, with companies like x.ai, Gluru and Angel.ai (formerly GoButler) raising equity funding rounds. As of 6/15/2016, deals to this category have already matched that of 2015.

·         Business intelligence startups bagged the third largest number in the last 5 years—over 150. Some of the highest-funded rounds in this category include a $110M growth equity round raised by Fractal Analytics, and a $90M growth equity rounds raised by Attensity.

·         Machine learning applications in finance picked up pace in 2014, with companies like Illinois-based Avant and Massachusetts-based Kensho Technologies raising funds.

·         The “security” category includes cybersecurity startups and video surveillance companies. The highest-funded round in this category was a $100M Series D rounds raised by Khosla Ventures-backed Cylance. So far in Q2’16, around 15 deals went to AI-based security startups.

·         AI in education has largely been a cold area for investors. Compared to other years, 2013 saw more deal activity to this category, with companies like Declara, Cognii and Queriumraising early-stage funds.

·         AI in IoT is heating up. The startups in this category bagged over 25 deals in 2015 compared to less than 20 in the previous year. This category does not include healthcare-specific wearable startups like PhysIQ and Sentrian (which are covered under the healthcare sub-industry). We used our mosaic score to identify promising companies in this space.

·         AI applications in e-commerce peaked suddenly in 2015, with companies like Twiggle,Unata, Granify and Celect raised equity funding rounds. This category does not include exclusive in-store assistance.

·         AI in customer relationship management is still in its nascent stages, with majority of the companies raising early-stage funds. The category reached a 5-year high in 2016, in just the first 6 months of the year, with companies like BirdEye, ContextSmith, True AI andAssist AI raising seed/angel or Series A rounds.

·         Interest in intelligent robots increased in 2015, with equity deals more than doubling from the previous year. A few notable deals last year include a $25M Series A round raised by family robot Jibo (backed by investors including CRV, Formation 8, Samsung Ventures and Two Sigma Ventures) and $17M Series B rounds raised by Blue River Technology (backed by investors including Data Collective, Khosla Ventures, Monsanto Growth Ventures and Syngenta Ventures).