The 10 Biggest Artificial Intelligence Startups in The World
The world’s most powerful person used to be Vladimir Putin. This year he was defeated by the Chinese president, Xi Jinping, according to the Forbes ranking of powerful people who make you question what you’ve been doing with your life so far. It’s safe to say that Mr. Putin knows plenty about power, and he believes that advances in artificial intelligence (AI) will not only change the world as we know it, but the global balance of power as well. It looks like other world leaders agree, with China and the US fighting for AI supremacy and the EU scrambling to catch up. Real growth is fueled by cold hard cash, so we’ve put together a list of the 10 biggest artificial intelligence startups in the world by funding. In order to compile this list, we’ve used data taken from Crunchbase and the CB Insights AI Top 100 list.
The Biggest AI Startup in The World
Founded in 2012, Chinese startup Toutiao has raised a whopping $3.1 billion in funding from the likes of Sequoia Capital, making it the biggest artificial intelligence startup in the world right now, and also the most highly valued at $20 billion. Toutiao is the news aggregation platform of Beijing company ByteDance that focuses on the Chinese market and uses AI to curate users’ news feeds and write news stories autonomously. While in other parts of the world Facebook seems to be the news outlet of choice these days, in China, local companies are serving the hundreds of millions of people looking for a curated newsfeed.
Since we covered the company earlier this year, they’ve joined forces with clickbait giant Buzzfeed to distribute entertainment content to Toutiao’s Chinese audience of 120 million, presumably to be vetted by the company’s 10,000 in-house censors. The company is also seeking international expansion to both emerging and developed regions, and is considering manufacturing their own AI chips to support this effort. In April, Toutiao and some of its competitors were ordered to suspend parts of their service in another instance of the regular government clampdowns trying to purge government criticism and risqué content from the internet.
The Second Biggest AI Startup in China
Founded in 2014, Chinese startup SenseTime has raised $1.6 billion to develop computer vision algorithms with a focus on facial recognition. Since we wrote about the company in February of this year, they’ve received two new funding rounds totaling $1.2 billion, led by Alibaba and Fidelity, that valued the company at $4.5 billion. Besides selfie apps, personalized shopping, and weather forecasts, SenseTime algorithms are used by local and federal Chinese government for public surveillance, contributing one third of the total company revenue.
The company is investing heavily in R&D and claims one of its latest algorithms can censor review and filter web content with a 99.5% accuracy rate. A few days ago, SenseTime announced the launch of a non-profit lab in collaboration with their partner and investor Alibaba to foster AI talent in Hong Kong.
The Biggest AI Startup in the United States
Founded in 2017, Pittsburgh startup Argo AI has raised $1 billion from Ford Motor Company to develop the “brains” for their new line of Level 4 autonomous self-driving cars to be launched starting in 2021. Featured earlier this year in our article on the 10 Most Funded Self-Driving Startups in 2017, the company is headed by Carnegie Mellon alumni who are also ex-Google and ex-Uber employees.
The team seemed to appear out of nowhere in February 2017 with Ford’s huge investment, and has grown to include more than 320 employees since. According to the company’s books, Ford now owns a majority stake but the team’s operational independence remains intact, and the Argo management team shares the board equally with Ford. The company remains open to strategic partnerships with other firms as well as a potential IPO in the future.
Update 07/12/2019: Argo AI has taken an investment of $2.6 billion from VW Group as part of a broader alliance between VW Group and Ford that covers autonomous and electric vehicles. This brings the company’s total funding to $3.6 billion to date.
Robots Made in China for All
Founded in 2012, Chinese startup UBTECH has raised $940 million to design consumer and commercial robots for a variety of applications. The lion’s share of their funding was an $820 million round in May of this year led by Internet giant Tencent which valued UBTECH at $5 billion. The company’s mission is to “bring a robot into every home, and truly integrate intelligent robots into the daily lives of everyone creating a more intelligent way of life”. While the mission statement may contain a hint of Engrish, the company appears to be on a steep growth path with lots of seemingly cool products on offer.
UBTECH plans to invest heavily in R&D using their new funding, and product plans include a robot operating system called ROSA, a cloud service, and a new generation of home and commercial robots to be released by 2021. The company has now expanded into ‘Murica with an office in Los Angeles and presence on Amazon along with a $300 Stormtrooper Robot. Their revenue target for 2018 is going to be an ambitious $310 million according to founder Zhou Jian.
Spend Money You Don’t Have
Founded in 2012, San Francisco startup Affirm has raised $720 million, $300 million of which was realized after we profiled the company last year. Investors include Morgan Stanley, Khosla Ventures and Peter Thiel’s Founders Fund. The Affirm team has developed a point-of-sale consumer financing technology that uses AI algorithms to perform an almost instantaneous credit check on customers. In other words, the service lets people spend money they don’t have in a “quick, easy and secure” way on e-commerce sites. Affirm originated more than $1 billion in loans last year and is expanding rapidly towards brick-and-mortar stores, Apple Pay, and offering financial advisory services. Their loans are 3-24 months long with percentage rates of between 10% and 30% depending on the results of the credit check. For all you millennials out there who don’t understand how interest rates work, the lower the number the better. Unless you’re the one loaning the money, in which case higher is better. You’re welcome.
Update 09/17/2020: Affirm has raised $500 million in Series G funding to advance their mission to build honest financial products that improve lives. This brings the company’s total funding to $1.5 billion to date.
Someone Who Will Always Recognize You
Founded in 2011, Chinese startup Megvii (short for Mega Vision) is another provider of facial recognition and therefore a rival of SenseTime. The company has raised a total of $607 million to develop their cloud-based computer vision service. Since they were featured in our list of the Top 10 Artificial Intelligence Startups in China last year, they’ve raised an additional $460 million in investments from a Chinese state startup fund, Ant Financial (Alibaba’s subsidiary) and Foxconn. Megvii’s Face++ face scan service is currently used by Alibaba’s online payment platform, among others. This April, Megvii acquired an ex-client of theirs called Ares Robot, in order to expand towards robotics use cases in retail.
The Biggest AI Startup in Germany
Founded in 2012, German startup Kreditech has raised $497.3 million from investors including Peter Thiel’s Founders Fund to develop a machine learning algorithm that uses clients’ social media and browsing data to determine creditworthiness. Like Affirm, Kreditech can provide access to credit for people with little or no credit history. Their proprietary algorithm checks up to 20,000 data points per application and provides a customer credit score within a minute. The service is currently available in Mexico, Spain, Poland, the Czech Republic, Russia, and India providing various consumer-facing credit products.
In the commercial segment, Kreditech offers their technology and services as a partner to other financial institutions and corporates, providing point-of-sale loans like Affirm does, and white labeling their technology to banks. For their recent expansion into the Indian market, the company partnered with PayU, an online payment provider present in emerging markets to provide monthly installments to e-commerce customers without a bank card. (If you want to see more work zee Germans are doing in AI, check out our article on The top-10 AI startups in Germany).
Update 09/26/2019: Kreditech has raised $22 million in funding to continue expanding globally. This brings the company’s total funding to $519.2 million to date.
The Biggest AI Startup in the UK
Founded in 2015, UK startup ACORN OakNorth has raised $448.5 million and landed at the top in our article on Top-10 British Artificial Intelligence Startups in the UK. ACORN is developing an online-only small and medium enterprise (SME) lending platform using a proprietary loan origination and scoring algorithm called ACORN machine. The company joined the unicorn club of the UK with the latest $125 million investment of Singaporean sovereign wealth fund GIC by the end of 2017. OakNorth has two major revenue streams: originating loans for SMEs, and selling the ACORN technology to other institutions.
OakNorth has originated $1.6 billion in loans as of March this year, and posted a profit of $14 million in 2017. Their success, aside from the ACORN machine, is due to serving a previously underbanked segment of midsize companies. OakNorth CEO Rishi Khosla confirmed the company is planning expansion into the Chinese market and is not considering a stock exchange listing just yet.
Update 02/08/2019: 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.
More Chinese Facial Recognition Stuff
CloudWalk Technology is another Chinese company using AI for facial recognition, and they’ve raised just over $389 million in funding so far. Besides local financial institutions and Chinese police departments, CloudWalk is rolling out its technology in airports across China and is piloting a predictive crime mitigation system that will make the movie Minority Report a reality in just a few years’ time. Chinese police are tracking citizens’ movements and activities with CloudWalk and combining this information with the population’s past records to predict who is likely to commit a crime and when. The company has recently signed a cooperation agreement with the government of Zimbabwe to export their dystopian vision to Africa as well.
Update 05/14/2020: CloudWalk Technology has raised $254 million in funding and intends to launch an IPO on Shanghai’s Star Market by the end of 2020. This brings the company’s total funding to $746.8 million to date.
Stealth Mode Robot Cars
Founded in 2014, Silicon Valley startup Zoox has raised $290 million in funding to develop a fleet of fully autonomous vehicles that will provide a taxi service that will “revolutionize transportation”. Since we looked at the company back in 2016, they’re still operating in stealth mode with their website only listing the 118 open positions they have at the moment. The team set out to design transportation robots that don’t need any human oversight, working on proprietary algorithms, car design and manufacturing, and a charging and maintenance station network all at the same time. They are very secretive about their product which will only be shown in 2020 according to Australian cofounder Tim Kentley-Klay, but major media outlets can test-drive the Toyotas they use to teach the AI algorithms.
Update 10/18/2019: Zoox has raised $200 million in a convertible note that will be folded into an upcoming Series C round to add some momentum to its quest to develop and produce its very individual version of a self-driving car. This brings the company’s total funding to $990 million to date.
It’s no surprise to see that half of the biggest artificial intelligence startups in the world come from China, which lends some credibility to the survey results from CB Insights that Anand sent out yesterday:
Of course, there are some people who want to bury their heads in the sand and pretend like China isn’t totally dominating the U.S. with their strong work ethic at the moment, but that’s another story. In terms of technologies, 30% of the companies are working on computer vision and 30% of the companies are working on fintech. 20% are working on autonomous vehicle development.
During our research, we also considered Wish, an e-commerce site that uses AI to personalize shopping recommendations and drop ships Chinese products to American consumers and that has raised $1.3 billion in funding so far. Our thought is that using AI as a recommendation engine has kind of been commoditized now. The same holds true for Traveloka, an online travel aggregator that has raised $500 million so far and is currently developing AI and machine learning methods to recommend better travel packages. Using AI for searching and making recommendations is old news now, and any firm that isn’t is already behind the times.
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