Top-10 British Artificial Intelligence Startups in the UK
Once upon a time, the British Empire ruled about a quarter of the world’s population. There was a saying: “The sun never sets on the British empire.” While those days of colonialism and conquest are (mostly) behind it, the United Kingdom remains a leading world power, mostly in tea and crumpet consumption. Though, as we understand it, the country still seems to be doing OK financially, boasting the world’s fifth-largest economy. You must admit that the Brits have a certain pragmatic pluck that has always made them competitive for an island nation with limited resources. Now we learn the United Kingdom is the latest country to join the artificial intelligence arms race.
We recently highlighted the top 10 French artificial intelligence startups after that country’s president—who we hear is a big fan of the movie Harold and Maude—announced France would invest $1.8 billion into AI over the next four years. Meanwhile, the Chinese are going all-in on AI, with companies ramping up on hardware like AI chips and other technologies such as computer vision to keep an eye on its nearly 1.4 billion citizens. To keep up with the Jacqueses and the Chans, the Brits have put together a multi-year $1.3 billion package of corporate and venture capital investments to boost the United Kingdom’s AI-based technologies. One of the country’s premiere AI startups was DeepMind before Google acquired the company for about $600 million in 2014, so the Brits have some homegrown talent.
We tooled around in Crunchbase a bit, and came up with a list of 10 British AI startups that have taken in the most funding so far.
Lending with AI
Topping the list of the top-10 British artificial intelligence startups is one of the UK’s newest unicorns, OakNorth. The three-year-old fintech company has developed an AI-powered platform called ACORN for making data-driven loan decisions for small- to medium-sized businesses. The company has raised a staggering $448.5 million, including a $125 million Series B last November, giving it a valuation of about $1.4 billion. OakNorth even reportedly turned a modest profit of about $14.6 million last year with about $1.65 billion in loans, about quadruple of where it was a year ago. The company recently said it expects to add up to another $2 billion in loans this year and claims it has stimulated the UK economy through its loans by helping create 4,000 jobs and nearly $5.5 billion in economic output.
Its flagship product, ACORN machine, works by pulling in hundreds of data points on whatever industry the loan is to be applied in to analyze the credit risk, which sounds like what other AI fintech startups are doing. That helps make the loan officer become an instant expert in the sector. In addition, the platform constantly monitors other loans being made in the same sector, providing a benchmark and early warning system to proactively monitor risk. OakNorth is also licensing ACORN to other banking institutions, providing yet another potentially huge revenue stream.
Update 02/8/2019: Oaknorth has raised $440 million in funding to double down on what it already does. This brings the company’s total funding to $1 billion to date.
Drug Discovery with AI
Another British unicorn, with a valuation of about $2 billion after a $115 million funding round in April, BenevolentAI has raised a total of $202 million. That makes the London-based company, founded in 2013, the most valuable private AI drug discovery company in the world. Its algorithms, able to draw upon more than 50 billion contextualized medical facts, can generate insights into the cause of many hard-to-treat diseases. The company claims its platform can cut early-stage drug discovery by four years. In addition, it can work more efficiently over the entire drug development process by as much as 60 percent against the pharmaceutical industry average. As you might imagine, that’s not an insignificant cost: A new report published by the Tufts Center for the Study of Drug Development pegs the cost of developing a prescription drug for market approval at $2.6 billion.
The company is targeting everything from Parkinson’s disease to blindness from age-related macular degeneration. Earlier this year, BenevolentAI also acquired a drug discovery and development facility in Cambridge that will allow the startup to begin clinical trial work.
Cybersecurity with AI
We did a deep dive into Darktrace about a year ago, and shortly after, the Cambridge-based cybersecurity startup raised another $75 million in a Series D, to bring total funding to $179.5 million, with investors like SoftBank in its corner. Founded in 2013 by some of the country’s bright minds at the University of Cambridge and intelligence experts from spy agencies like the Bond-esque MI5, Darktrace appears to be doing pretty well since we last checked on it, doubling its business under contract and adding more than 200 employees.
Darktrace takes its inspiration from the human immune system. Our immune system works by learning about what is normal for the body, and then identifies and zaps anything that does not fit the ever-evolving pattern of what qualifies as status quo. Darktrace applies the same logic by employing machine learning and AI algorithms to understand what is normal for every device and user on a network. Anything that does not fit the pattern of normality gets zapped.
Building Chips for AI
We first learned about Graphcore, an AI chipmaker out of Bristol, about a year ago for our article on startups building AI hardware. The company, found in 2016, has since taken in another $80 million to bring total funding to $110 million. It also added top VC firm Sequoia Capital to its already impressive list of investors. Graphcore is competing in an increasingly competitive AI processor sector, but seems to have some very promising hardware with its IPU (intelligence processing unit), which it claims can improve performance of machine learning tasks by 10x to 100x compared to others on the market. One test reportedly showed that eight IPU PCIe cards could run a training model in the same amount of time as 128 GPU cards. Watch out, Nvidia (NASDAQ:NVDA).
Travel App Using AI
In our deep dive on Blippar, a London-based startup that combines augmented reality and computer vision for AR marketing and other applications, we were a little underwhelmed with what amounted to be cheesy games to “engage” with big brands like McDonald’s and Cracker Jack. The company hasn’t raised any additional capital since 2016, with about $99 million in funding. Last year, however, the company launched an AR travel app that allows users to navigate and explore 300 cities worldwide using what the company calls urban visual positioning. It uses computer vision to provide more than double the location accuracy of GPS, providing 3D directions and the names of streets and buildings wherever the mobile device is pointed. Never get lost on a pub crawl again.
Update 12/20/2018: “$1 billion UK tech startup Blippar collapses into administration and lays off all staff,” is the title of an article today by the Independent.
Getting Healthy with AI
London-based Babylon Health, founded in 2013, is a medical app company that includes a powerful AI chatbot as part of its service. The startup has raised $85 million, and we did a deep dive into the company’s technology about a year ago. Since then, Babylon Health has partnered with Chinese tech giant Tencent to incorporate the medical AI chatbot capabilities into Tencent’s own technologies. That likely means that about a billion Chinese will soon have access to the medical app through Tencent’s WeChat social media platform. That’s quite a bump from the estimated 1.3 million Babylon Health users in the UK and Europe.
Getting Personal with AI
Founded in 2010, London-based Qubit has raised nearly $75 million, including from some big hitters like Goldman Sachs (NYSE:GS), Accel Partners and Salesforce (NYSE:CRM). Qubit has nothing to do with quantum computing and everything to do with using machine learning to get more customers to buy more isht online. It’s all about personalization and customization, themes we’ve hammered before. Qubit serves companies in retail, travel, and e-gaming. Its ML platform sifts through data and looks for sets of customers who are potentially under-monetized (ie, not buying as much isht) compared to their peers:
Its clients can use these opportunities to identify visitor groups with personalizations or save them for monitoring or analysis to increase future revenue. Qubit claims it can deliver 14 times better revenue per visitor with its platform.
Giving Voice to AI
Founded in 2005, Bristol-based XMOS, which previously gave birth to Graphcore, has raised $72.4 million for its audio and voice interface hardware targeted for the Internet of Things marketplace. The company added the AI component when it acquired a little American startup called Setem Technologies, which had solved the “cocktail party problem” by developing technology and algorithms that could differentiate voices in a noisy environment.
That breakthrough has enabled the company to offer an Amazon Alexa Voice Service development kit. That means Alexa no longer needs to be front and center but can be tucked away like any other tchotchke in your house. One that hears EVERYTHING you say.
Update 10/02/2019: XMOS has raised $19 million in funding to ramp up production and develop the company’s product roadmap for the AIoT (Artificial Intelligence of Things) sector. This brings the company’s total funding to $94.8 million to date.
ID Verification with AI
Founded in 2012, Onfido out of London has raised about $60 million and also counts Salesforce as an investor. We highlighted Onfido last year on our list of digital identity verification startups. Onfido uses machine learning to validate a person’s identity through facial biometrics, so it must possess some snazzy computer vision algorithms. Onfido’s machine learning technology automates checks on more than 600 documents in nearly 200 countries, with about 1,500 customers worldwide.
Update 04/03/2019: Onfido has raised $50 million in new Series C funding to help address that ongoing — and growing — problem of efficiently verifying people are who they say they are when using digital services with their solution. This brings the company’s total funding to $110.3 million to date.
Log-in with AI
Founded in 2012, London-based Callsign has taken in $38.8 million from names like Accel Partners and Qualcomm (NASDAQ:QCOM). We recently did a full-length feature on Callsign and its Intelligence Driven Authentication system. Not much new to report there, so let’s wrap it up …
It’s no coincidence that half of the companies above—Benevolent AI (2017), Darktrace, Graphcore, Babylon Health, and Onfido—have appeared on the CB Insights list of the AI 100. Solid companies with proven technologies should be drawing the biggest VC dollars. As investors, we would like to see an exit in the form of an IPO, and companies as dynamic as OakNorth and Darktrace are as likely candidates as any. For example, OakNorth has already confirmed plans to push into China and there are already suggestions it could go public in the future. If you’re interested in dabbling in a public UK company using artificial intelligence for business process automation, then check out our story on Blue Prism.
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