AI VENTURES

AI-Startups: The Global Wave of Capital Investments

Some people might find it hard to believe that the first wave of Artificial Intelligence projects began in the 1950s. Granted, companies were using an elementary computer algorithm, but it grabbed the interest of many governments around the world and began the initial capital investment into AI. Governments were funding R&D like there was no tomorrow, but as time went on, interest wavered and investment stop, causing the AI advances to come to a grinding halt.  

Fast forward 30 years into the ’80s, the venture capitalist boom was set into motion. Governments were no longer the primary source of funding. Start-ups did not need to jump through hoops and follow stringent guidelines set by the big man in charge. All one required was a good idea and a memorable pitch to get that first round of investment. With this new avenue of capital raising, diverse start-ups were being invested in left right and centre. However, AI still had troubles of being ahead of its time, like Van Gogh and his painting, machine learning was not apricated until many years later. 

Since the introduction of the internet and the tech boom in the late ’90s, early 2000s, AI has become the hot topic on every venture capital’s lips. The 2019 AI Index report also supports this notion with a record high of 70 billion dollars’ worth of investment into AI Companies, with 37 billion purely for start-ups alone and with the world now in the third wave of AI whilst experiencing its first global pandemic in over 100 years, what does this mean for start-ups and capital funding? Has the well dried up? Well, as much to many people surprise, the opposite has happened. 

Despite the economic effects of COVID-19, the KPMG Venture Pulse Report documented a record investments into Australian start-ups. The report indicates a dramatic increase from financial Q2 of 2019 compared to 2020, with a total of AUD621.4 mil of funding being pumped back into the Australia economy, demonstrating a 38.5% increase. The causation behind this newfound trust in young entrepreneurs’ ideas might not be what one would expect; it is the phenomenon of global lockdown on international travel. 

Before Australia incurred lockdown in March 2020, entrepreneurs went through the rigmarole of obtaining a face-to-face meeting with a potential venture capitalist. This limited many start-ups with a geographical dilemma. Venture capitalist pool was mostly confined to the country the entrepreneur was operating in and with Australia being just as large as the European continent, travelling inter-state also brought another significant hurdle to a company’s prospects. 

Then suddenly, Zoom and Microsoft Teams become the new norm on how business is conducted in 2020. As the world steered away from the in-office system, there was unease among the idea of conducting business operations entirely via the internet, but on the contrary, the business world becomes more connected than ever before. No longer were start-ups limited by the geographical aspect, as Venture Capitalist adapted to a more digital way of communication. This meant a plethora of new opportunities for AI Start-ups as the technology ecosystem redefine itself as being one of the most global markets out there. Before, Silicon Valley was the place to make one’s name as a tech-giant, but with the new evolutional step, no longer can one geographical location define a company’s success. 

AI Ventures recently held an event to tackle the notion on how AI Start-ups can raise capital. In the Q&A, a leading investor, Curt Shi was asked the following question: Due to the current uncertain times, has this led to international investors to be more conservative about where they will invest their money? 

“I think the opposite has happened, when uncertain time arise, many people around the world hold onto their cash and granted that did happen at the beginning of the year, but now it has become easier to talk to people around the world and being based in Beijing on lockdown, I cannot travel to see people as much, which has led me to conduct more investment through online platforms, causing fewer limitations of where I can invest” – Curt Shi 

The world has changed drastically over the past nine months, and a resurgence of resilience and adaption of the global market is unprecedented. The new wave of AI not only came during a new wave of business protocols but a new wave of capital investment. 

With this in mind, AI Ventures brings our Virtual incubator to help navigate this new environment. Touching on subjects such as Capital Funding, Corporate Structure, MVP Feasibility and more over a 12-week intensive.  

Find out more on our incubator page: https://aiventures.com.au/incubator/ 

Article By : Indy Schoen

AI Ventures has an ambition to help build the next generation of AI-driven startups . Our Mentor program is currently running and we welcome innovative startups focusing on AI, Machine Learning and Robotics to apply.

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