1. A Deep Dive in the Venture Landscape of Artificial Intelligence and Machine Learning September 2015
Ajit Nazre
Rahul Garg

2. Artificial Intelligence Evolution
1956
John McCarthy organized a conference at Dartmouth & named the field as Artificial Intelligence
1995
US Department of Defense uses predator UAV in Balkan War
2011
Debut of Virtual personal assistants like Apple’s SIRI & Microsoft’s Cortana
Jan 2014
DeepMind team uses deep learning algorithms to create a program that wins Atari games
Jun 2015
Facebook launches Moments that detects faces and shares photos with friends to whom they belong
1950
Alan Turing published a paper about the possibility of machines with true intelligence
1997
IBM’s Deep Blue wins chess against World Champion Gary Kasparov
2011
IBM Watson computer defeats Jeopardy game show champions
Oct 2013
Vicarious breaks any ‘Captcha’ passing the Turing test
May 2015
Google self driving cars complete 1M miles autonomously
Jun 2015
DeepMind teaches program how to read
s – Start of AI as a concept but no real applications
– AI/ML mainly used in Military & Academia
2005 onwards – Large tech companies such as IBM, Microsoft, Google, and Facebook have invested in AI/ML for commercial applications
Artificial Intelligence is on its 3rd reincarnation since its first birth in 1950 and looks like it has longevity this time around

3. Artificial Intelligence / Machine Learning Classification
Deduction, Reasoning, Problem Solving
Knowledge Representation
Planning
Perception: Computer Vision
Machine Learning
Robotics: Motion and Manipulation
Natural Language Processing
Social Intelligence
Supervised Learning
Unsupervised Learning
Reinforcement Learning
Decision Tree Learning
Association Rule Learning
Clustering
Similarity and Metric Learning
Bayesian Networks
Neural Networks
Inductive Logic Programming
Support Vector Machines
Sparse Dictionary Learning
Genetic Algorithms
Deep Learning
Manifold Learning

4. Multiple Factors contributing to Dramatic Improvement in Prediction Accuracy
Increasing Prediction Accuracy of Algorithms =
Improved Decision Making
Increase in affordable Compute Power
Big Data
Faster networks
Cloud Infra-structure
Sensor Networks
Advances in Neuroscience
“Whenever we can replace human judgment by a formula, we should at least consider it.” -
Daniel Kahneman (2002 Nobel Prize in Economics)

5. Applications of AI/ML in Daily Use Already
Info
Search engines
Sentiment analysis (or opinion mining)
Information Retrieval
Spam filtering for
Speech and handwriting recognition
Spoken language understanding
Stock analysis
Structural health monitoring
Syntactic pattern recognition
Topic spotting: categorize news articles
Weather prediction
Tools
Face Detection
Finance – Derivatives Trading
Game playing
Software Testing
Internet fraud detection
Machine translation
Medical diagnosis
Mood analysis
Brain machine interface in prosthetics
Optical character recognition
Recommendation systems
Robot locomotion
Services
Advertising - Targeting
Bioinformatics
Automatic word completion
Chemical Informatics
Classifying DNA Sequences
Computer Vision – Object Recognition
Customer Segmentation
Detecting Credit Card Fraud

6. R&D Activity in AI / ML as measured by Patents granted
Source: MarketRealist.com
IBM and Microsoft had more patents in AI / ML granted in 2014 than all others

7. M&A Activity in AI / ML is Heating up
No. of companies acquired in AI/ML
IBM
AlchemyAPI, Silverpop Systems, Curam Software, Languagae Analysis Systems
Apple
Metaio, Cue, Novauris Technologies, Polar Rose, Siri, FingerWorks
Facebook
Pebbles, Surreal Vision, Ascenta, QuickFire, Wit.ai, Oculus VR, SportStream, Jibbigo, Face.com, RecRec
Google
Dark Blue Labs, Vision Factory, Jetpac, Quest Visual, Titan Aerospace, Deepmind Technologies, Boston Dynamics, Bot & Dolly, Holomni, Redwood Robotics, Industrial perception, Schaft, Flutter, Wavii, Behavio, DNNresearch, Viewdle, Pittpatt, Saynow, Phonetic Arts, Metaweb
Yahoo
Tomfoolery, Cloud Party, Skyphrase, LookFlow, IQ Engines, Qwiki
Google is most acquisitive (21 companies) in the space followed by Facebook (10 companies)
Source: Wikipedia

8. Companies that have external funding of >$100k
AI / ML Venture Funding Analysis: Methodology
2800
AI & ML companies from sources: Angel List, Crunch base, Tracxn, Venture scanner, VC websites, News articles & secondary research
1781
Active companies after weeding out public, acquired, closed down, non existent companies
312
Companies that have external funding of >$100k
Created a database of over 2800 AI/ML companies from several sources including Angel list, Crunch base, Tracxn, Venture scanner, Portfolios of major VCs, News Reports & Secondary Research
Weeded out public, acquired, closed down and non existent companies (with no website) arriving at a list of 1781 companies
Filtered the list further to 312 companies based on funding > $100k
In addition to the focus areas in AI / ML areas defined on slide 3, we have extended our analysis to areas like augmented reality, image / facial recognition, and drones that overlap multiple areas.

9. More than half of the AI/ML companies are based in the US
Active AI / ML Ventures by Country in 2015
n= 1781
More than half of the AI/ML companies are based in the US

10. AI / ML Ventures based on Funding and Location
Nearly 18% of companies are funded
Out of funded companies , nearly 40% are in the SF Bay Area & 70% in North America
SF Bay Area has the highest density of funded startups followed by New York & London

11. 62% of the startups still pre series A
AI / ML Startups are still in their Infancy
n=312
62% of the startups still pre series A

12. Venture Funding and Most Active VCs in AI / ML
No. of Investments in AI/ML companies
Khosla Ventures:
Blue River, Scaled Inference, Atomwise, Lumiata, Kaggle, Idibon, Metamind, Pymetrics, Ayasdi, Catalia Health, Theatro, Thync
Source: Company Websites
Google Ventures:
Expect Labs, Wonder Workshop, Clarifai, Orbital Insights, Airware, Agent, AltspaceVR, Bento, Building Robotics, Framed, Skycatch
Intel Capital:
API.ai, Cloudmade, Emotient, Expect Labs, Eyesmart, PrecisionHawk, Hooklogic, Prelert, Reflektion, Total Immersion, Fortscale,Whoknows, Incoming Media, Occipital
Venture Investments in $M in AI/ML companies
Two Sigma Ventures:
Anki, 3D Robotics, Rethink Robotics, Jibo, Kasisto, Dextro, Socure, Floored, Canary, Zymergen, Indico Data,
Source: CB Insights
RRE Ventures:
DigitalGenius, Yhat, Clearpath Robotics, Jibo, Palantir, Giphy, Viglink, Airware
300% increase in venture funding from ‘13 to ‘14. Intel Capital, Google, Two sigma & Khosla ventures most active in investing in AI / ML

13. Funded Ventures in various fields of AI / ML
Machine learning, Robotics, AR and Image recognition are most actively funded areas

14. Major Fields for AI / ML Venture Investment by Geography
North America is leading the way but Europe has significant presence in AI & AR areas

15. 72% of the funded startups targeting enterprise applications
Areas of Application of Venture funded companies in AI/ML
n=312
(consumer apps, consumer electronics, educational applications for consumers & toys)
72% of the funded startups targeting enterprise applications

16. Impact across a wide range of industries
AI / ML Ventures with Applications across Industries
n=312
Impact across a wide range of industries

17. Aerospace Today Future
Cumbersome & manual process of maintenance and repair using field manuals that have to be frequently updated
Field service agents can call or chat with support from his/her augmented reality view
Companies making it happen: Atheer Labs, Augmate, Infinity AR, Total Immersion, Vuzix
Pic Courtesy: Atheer Labs

18. Farming decisions based on tradition and intuition
Agriculture
Today
Future
Machine learning algorithms using sensor data and aerial imaging help farmers make intelligent data based decisions increasing yield
Farming decisions based on tradition and intuition
Companies making it happen: Blue River, Farmlogs, Greensight, Mavrx, Pulsepod, Terravion
Pic Courtesy: Farmlogs

19. Automotive Today Future
Cars driven by humans, prone to errors (nearly 1.3M people die in road accidents every year)
Driverless cars – leading to comfortable experience & less human fatalities
Companies making it happen: BMW, Daimler Benz, Google
Pic Courtesy: Google

20. Background Checks Today Future
Automated background checking process through APIs, real time ID authentication using image recognition. Nearly 60% reduction in costs
Checking of background information, documents and identity manually taking 1-2 weeks
Companies making it happen: Onfido
Pic Courtesy: Onfido

21. Communications Today Future
I’m fine thank you
मैं ठीक हूं धन्यवाद
Hi, How are you
Hi, How are you
People will be able to talk to one another without knowing the other person’s language – Nothing lost in translation
People can talk to one another only in a common language that they speak
Companies making it happen: Lexifone
Pic Courtesy: Clker.com

22. Customer Care Today Future
Sir, Please help me with the authentication & tell me your DOB, Address, Mobile No.
My Password is XXXXX
Biometric Voice recognition based instant authentication
Time consuming process of Authentication
Companies making it happen: Agnitio, Nuance, Verbio, Voicebase, Voiceitt, VoiceVault

23. Customer Care Today Future
Press 1 for Credit Cards, Press 2 for Debit Cards, Press 3 for Loans, Press 4 for Netbanking……
Virtual assistant that can converse like humans & assist without Menus
Cumbersome & time wasting Voice Menu
Companies making it happen: DigitalGenius, Expect Labs, Nuance

24. Doctor reads static patient charts before or after visiting a patient
Healthcare
Today
Future
Doctor reads static patient charts before or after visiting a patient
Doctor can read all relevant reports dynamically using gestures during her patient visit
Companies making it happen: Atheer Labs, Augmedix, Infinity AR

25. Media
Today
Future
Wonder if that Jersey came in my size
Just ordered the Jersey directly
Automatic content recognition will allow advertisers/ programmers to inject interactivity & context relevant content
Watching ads on TV is avoided as they are not actionable and mostly irrelevant
Companies making it happen: Cognitive Networks, Datascription, Dextro, Enswers, Magic Pony Technology, Persado, Videntifier Technologies
Pic Courtesy: Forbes

26. Navigation Today Future
On windshield navigation with heads up display that recognizes the surrounding and gives instructions
Driver needs to divert his gaze or has to give rigid voice instructions
Companies making it happen: Nuviz, Wayray
Pic Courtesy: Wayray

27. Mundane tasks in office leading to decreased productivity
Office Productivity
Today
Future
Automatic meeting schedulers, note takers, speech to text transcription & virtual personal assistants will improve productivity
Mundane tasks in office leading to decreased productivity
Companies making it happen: Assistant.to, Gridspace, Idibon, Robin Labs, Thoughtly, X.ai, Zahdoo
Pic Courtesy: Typepad & Coolcontourproducts.com

28. Oil and Gas Today Future
Crack Detection: It takes human 5 hours per inspection with 92% accuracy (Avg cost ~ $7.5)
20 seconds with 94% accuracy through image recognition (Average Cost ~ $2)
Companies making it happen: Tractable
Pic Courtesy: Wikipedia

29. Recruiting Today Future
Impossible to manage candidates with required behavioral skills
Neuroscience based games will match candidates with required skills
Companies making it happen: Connectifier, Pymetrics, Talentoday
Pic Courtesy: Pymetrics

30. Wealth Management Today Future
Sentiment analysis, crowd sourced research & algorithms will make investing more transparent and better informed
Stock trading & investing happens mainly on personal skills and divine luck
Companies making it happen: Betterment, Estimize, Narrative Science, Personal Capital, Sigfig, Wealthfront