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AI Startups Investment Trends from 2019 to 2024

November 27, 2024

Total Investment

  • $291.3Bn (USD) was invested across 10,230 deals. This represents a substantial amount of funding, demonstrating continued interest and trust in AI technologies.

Top AI Segment by Investment

  • Generative AI: Dominates the list with over 1974 deals since 2019, signaling a significant focus on tools that improve operational efficiency, workflow automation, and business intelligence.
  • AI Power Drug Discovery: With 133 deals since 2019, this highlights the importance of AI in medical technologies and related technologies.
  • AI in Foodtech: With 119 deals since 2019, this is a new category that emerged over the past 5 years.
  • LLM  Agents: These tools, aiding in AI/ML application development, garnered 93 deals.‍
  • Digital  Twins: A new category that emerged with great interest, garnered 78 deals.

4. Investment Trends Over Time

  • The average deal size for Seed Stage in Q4 2024 increased by 2.5x to $5.1m from $2.0m in Q1 2020.
  • The average deal size for Series A in Q4 2024 increased by 2.8x to $24.3m from $8.5m in Q1 2020.
  • 2019–2021 Growth: Investments increased significantly, peaking in 2021 at $315 million. This growth aligns with the AI boom during the pandemic, as companies sought digital transformation and automation.
  • 2022–2023 Decline: Funding dropped to $250 million in 2022 and $157 million in 2023, possibly due to market corrections, macroeconomic uncertainties, and rising interest rates impacting VC funding.
  • 2024 Recovery: Investments rebounded sharply to $450 million, driven by a renewed focus on generative AI, large language models, and their applications across industries.

5. Key Observations

  • Industry Dynamics: The dominance of software-related sectors (business, financial, and development tools) reflects the software-first nature of AI commercialization.
  • Hardware Investment: Moderate funding in AI-specific semiconductors suggests that while critical, it is not the largest driver of current VC interest.
  • Sector Diversity: The presence of industries like automotive underscores the versatility of AI and its penetration into traditional sectors.
Total Investment in Seed, Series A/A+ 2020 2021 2022 2023 2024
Generative AI $1,043.70 $2,082.30 $2,797.80 $4,371.60 $4,262.70
Autonomous Trucking $3,265.20 $98.40 $256.80 $20.00
AI-powered Drug Discovery $134.40 $366.30 $159.50 $67.80 $1,129.90
AI neoclouds $8.60 $376.00 $31.10 $54.00 $288.50
Artificial General Intelligence (AGI) Research $2.40 $27.20 $66.00 $509.00
LLM Agents $26.70 $67.00 $51.30 $117.50 $276.20
AI in Foodtech $34.20 $86.20 $108.10 $34.60 $46.30
Indoor Farming $10.70 $72.90 $141.70 $35.80 $19.50
AI-powered Code Completion $13.60 $51.20 $37.90 $19.50 $118.10
High Performance Computing $0.10 $98.90 $30.10 $104.00 $3.60
Quantum Computing $21.40 $61.80 $50.10 $69.50 $33.50
Digital Twins $62.20 $29.40 $26.80 $72.70 $29.40
Synthetic Data $20.30 $30.30 $36.00 $32.90 $79.80
Humanoid Robotics $13.00 $11.80 $17.50 $95.70 $33.00

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* Sources available in the Octagon app
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