Funding to Artificial Intelligence Startups Reaches New Quarterly High

Though deals to private artificial intelligence companies -- excluding incubator/accelerator rounds -- fell 10% in Q2'16, dollar funding reached an all-time high. Q2'16 saw 3 100M mega-rounds by companies using AI: a 154M Series A round to China-based healthcare startup iCarbonX (backed by Tencent, Vcanbio), a 100M growth equity round raised by New Jersey-based Fractal Analytics (backed by Khazanah Nasional Berhad) and a 100M Series D round raised by California-based cybersecurity unicorn Cylance (backed by investors including Blackstone Group, Insight Venture Partners, and Khosla Ventures). Our AI category includes companies applying AI solutions to verticals like healthcare, security, advertising, and finance as well as those developing general-purpose AI tech. Nearly 70% of the deals went to startups in the United States in Q2'16. A majority of the startups raising funds were still in their early-stages: Nearly 60% of the deals went to startups raising seed/angel and Series A rounds, while mid-stage startups (Series B and C) received 12% of the deals.