AI startups are in the money: What are you doing?

Kunal Jain 27 Sep, 2016
9 min read


You are either investing in AI or you are not. If you are, you are making a bet which might continue to pay off for next 10 – 20 years. If you are not, you are just signing your own Death Certificate.

Let me explain why I make such a strong statement and like an analyst, I will start by throwing a few numbers. Here are a few predictions made by Gartner recently. By 2018, more than 3 Mn workforce will be supervised by ‘robo-boss’ or 20% of business content will be authored by machines! I am feeling my job is up for grabs by machine!

Still not convinced? In last 5 days, there has been news of 2 more AI startups have been acquired by Google & Amazon respectively. In fact, since 2011, more than 60 artificial intelligence companies have been acquired by tech giants including Google, Yahoo, IBM, Apple etc. There are many new ventures whose acquisition contract might be in draft as I you are reading.

Needless to say, companies are seeing huge potential in nurturing AI capabilities to become more powerful. But why? What’s so good about AI startups that they are being sold like hotcakes? I thought about it and decided to present my views in this article. Read on, you might get that breakthrough idea to take your career to next level!

What should you learn from the incredible success of AI Startups?


Why are AI startups getting sold like hot cakes?

AI startups are getting sold like hot cakes because they are building products, which are capable of solving business problems as efficiently (or even better) than human beings in various aspects. Large scale automation and Internet of Things and enabling a world of limitless possibilities.

These startup ideas are innovative. These people are thinking ahead of time. With an awesome product, they may fail to create a large impact, but backing of a giant tech shark provides them access to much needed resources.

The recipe of building such products come from machine learning. Yes, using data and machine learning, even you can also build a program, which trains, learns and deliver results better than humans. But, it’s not easy. Had it been easy, every other block in your neighborhood would be prospering with an AI startup. Let’s look at some of the problems being solved by AI startups:

  • Recognizing characters from an image
  • Improving voice recognition in native languages
  • Detecting malicious patterns in web applications
  • Creating driverless vehicles
  • Predicting stock performances with better accuracy
  • Speech translation
  • Developing intelligent chat bots
  • Build games which challenges human intuition
  • Improving efficiency of product deliveries
  • Detecting fraudulent behavior in humans (customers, employees)
  • Detecting human diseases or epidemic
  • Improving user experience on Internet

and, there are many others. Did you study a common pattern? All of these problems are the ones which prevailed over the decades, but haven’t found a solid solution. That’s why artificial intelligence has taken the initiative. Do humans really need to worry? I wonder!


Does this inspire you to start your own AI startup?

Trust me, timing couldn’t have been better. If you are into Machine Learning, you already know the potential of what you are working on. If you are still not building products on top of your models, you are in a similar situation as that of a kid with a key. The child is fascinated by the looks of the key and they does not open the door in front of him.

In order to inspire you further, I have created a list of startups which were bought in recent past. These startups have put their technical skills to practical use and are solving big real world problems. Have a look at them and you would know, what I am talking about.

I hope you would be as inspired as I was while creating this list. This is your opportunity to make it big – identify your idea and start building a product around it.


List of Startups which got acquired

The list below comprises of top giants from corporate industry today. Beyond these companies, there are several other companies doing such acquisition in AI space but have gone unreported. Therefore, consider this list as just the tip of the iceberg.

With no surprise, Google remains the largest shark in tech ocean. In last 5 years, it has acquired 9 AI startups. Let’s look some of the startups acquired and what do they do:


  • Moodstocks – This acquisition took place in July 2016. The deal amount remains undisclosed. This startup is based out of Paris. It builds specialized image recognition software for smartphones which is capable of turning mobile cameras into smart sensors.
  • DeepMind – This acquisition captured a lot of media attention in 2014. Google bought it for a whopping $600M. Early this year, DeepMind’s AlphaGo defeated Lee Sedol (World Champion) in Go. Now, DeepMind is working on its AI to make the cooling units in google data centers 40% more efficient.
  • API.AI – With undisclosed deal terms, google bought this startup 6 days back. offers a conversational (chatbot) user interface platform for channels such as Slack, Kik, Facebook Messenger etc.

Other Acquisitions: Cleversense, DNNresearch, Emu, Jetpac, Dark Blue Labs, Vision Factory, Timeful, Granata Decision Systems


  • AlchemyAPI – This Denver based startup delivers wide variety of text analysis and image recognition capabilities via API. AlchemyAPI excels at analyzing text for sentiment, category and keywords, and for recognizing objects and faces in images
  • Cogenea- Cogenea is a virtual assistant software startup. IBM plans to integrate its capabilities into watson cognitive computing platform.

Other Acquisitions: Explorys


  • Turi – Apple acquired this startup at $200 million this year. Turi, founded by a professor from University of Washington, provides a fast, scalable machine learning platform lets developers build apps with machine learning and artificial intelligence capabilities that automatically scale and tune.
  • Tuplejump – This acquisition happened 4 days back. Terms of the deal are yet not known. This startup provides a data engineering platform used to build machine learning models on big data quickly.

Other Acquisitions: VocalIQ, Emotient, Perceptio


  • itseez – This startup is an expert at computer vision which includes methods for acquiring, processing, analyzing and understanding images from the real world and implementations for embedded and specialized hardware (IOT).
  • Indisys – This startup builds softwares based on natural language processing (NLP) that facilitate intelligent user interaction with computer systems.
  • Nervana – It’s a 2 year old startup which got acquired in August 2016 at $408 million. Nervana provides an open source platform to build machine learning systems. Among other things, their platform is powerful enough to analyze seismic data and determine the promising places to drill for oil.

Other Acquisitions: Saffron


  • IQ Engines – It’s an image recognition startup geared towards improving photo analysis, facial recognition in online photo albums and user interactions.
  • Lookflow – Another image recognition startup which uses deep learning to enhance image content recommendation according to user behavior.

Other Acquisitions: Skyphrase


  • Genee – This startup helps to automatically schedule meetings based on user’s schedule.
  • Swiftkey – This startup uses artificial intelligence to predict what a user is going to type i.e. they have build a predictive keyboard. They got popular after Stephan Hawkings used their product in a $250m deal.


  • – 5 days ago, Amazon has hired’s CEO as a Product Lead. Though, it hasn’t been explicitly announced, but it’s fair to say that this startup is partially acquired by Amazon. It’s just a matter of time when the final announcement will be done. This startup builds chat bots.
  • Orbeus – Amazon acquired this startup early this year to boost their image recognition abilities. This startup provides a tool that software developers can use to add facial or object recognition to their own products.


  • Magic Pony Technology – This startup was bought at $150 million in June 2016. This startup uses neural network and machine learning to help develop graphics for virtual reality or augmented reality applications
  • Madbits – This startup is primarily interested in the task of image search, and the creation of intelligent, dynamic image sets, to automatically organize large databases of images
  • Whetlab – This startup aims to automate hiring system by tuning machine learning at core and also automating company’s internal system more quickly than before.

Other Acquisitions: TellApart


  • MetaMind – Early this year, this startup got acquired at a non disclosed deal amount. Metamind is known for this advanced image recognition capabilities by using recursive neural network at its core.
  • PredictionIO – PredictionIO provides a general purpose open source machine learning software.


AI Startups which can actually make BIG (For Investors)

These are well funded startups but haven’t been acquired yet. Can make big? Chances are high because these big companies are not ready to let go of even the smallest value provided by AI products. Among all sectors, it seems healthcare industry is completely soaked by path breaking AI startups.

Below is the list of top 10 startups which I feel has an incredible product to offer and they can actually make BIG:


oiuIt’s the most popular startup in machine learning fraternity these days. In total, company has raised $34 Millions. It provides an open source platform enabled with fast scale machine learning for data scientists. Alongside, they offer multiple products such as Sparkling Water, which combines the sheer power of Apache Spark with H2o platform. The have realized its product APIs to make it accessible through R, Python, Java as well.


2. DataRobotdata-robot-logo-5

DataRobot is one of the fastest growing companies in US in analytics industry. Currently, this company is valued more than $60 million. It provides a cloud based machine learning software to generate predictive models. With intelligent algorithms and automation, they have made predictive modeling process faster than ever. The company is led by top kagglers around the world.


3. Ayasdi

atyFounded by mathematicians, this startup has raised $97.9 million till now. Ayasdi provides a machine intelligence software which solves most complex and impact analytical challenges faced by Fortune 500 companies. Also, it is expert at detecting, analyzing and exposing patterns from topological data that humans may miss. Last year, the company reported 400% growth in their bookings.


4. iCarbonX

icsThis China based startup has brought revolution in the healthcare sector. This startup has raised $199 million till now. It provides an artificial intelligence platform which uses health data and make predictions about plausible disease strokes. Managing our lives digitally is the prime motto of this company. It is also aimed at creating a professional data collection platform of life long data from world’s largest chinese population.


5. Butterfly Network

butNoted bioscience entrepreneur Jonathan Rothberg along with a group of physicists , founded this startup which develops a new kind of medical imaging device that will see the human body in “completely new ways”.  Then, it uses artificial intelligence to extract clinical insights from it. This startup has raised $100 million till now. This startup also plans to develop non-invasive surgical technology.


6. Skytree

skySkytree is a machine learning company which provides a predictive analytics software to help companies leverag the power to discover deep analytic insights, predict future trends, make recommendations and reveal untapped markets and customers. This startup has raised $18million in Series A funding in 2013. It’s platform is designed to handle large amounts of data – structured or unstructured so that data scientist never have to work on samples.


7. analyticsMD

mdEmerged out of YCombinator, this startup is dedicated to tackle a critical but crucial problem i.e. devising ways to improve the operational efficiency of hospitals using AI. They provide a real time analytics platform which constantly monitors the demand fluctuations and inform hospital officials in real time. This allows hospital make necessary changes in order to cater to the demand. This start has raised $840,ooo till now.


8. Darktrace

darkThis is a cyber security startup aimed at developing technology to help companies respond to not only human-written cyberattacks but also the pending threat of machine-learning-based attacks that. Right now, they offer ‘Enterprise Immune System’ that is installed in a company’s network, which then learns, trains and makes sense of what the web traffic is upto. In case of malicious detection, it takes immediate actions to counter it. This start up has raised $104.5 million till now.


9. 6Sense

semThis startup has emerged as an early leader in the fastest growing market for predictive B2B marketing and sales intelligence. They have built a ‘Buyer Intent Network’ based on robust data science and machine learning techniques, capable to analyze & capture time-based, structured and unstructured behavioral data from thousands of sources. Currently, their platform processes billions of rows of buyer every month collected from online communities.  This startup has raised $36 million till now.



xaiThis start provides a smart AI enabled virtual assistant “Amy” which handles all your meeting schedule, does the negotiations of time and place, and send out meeting invitation all with its inbuilt intelligence. Have you seen movie Her? You could relate better if you’ve seen it. This startup is based out of New York. Until now, it has raised $34.4 million in 3 rounds of funding.


End Notes

It wouldn’t be incorrect to say that the world is progressing fast towards automation. Building products which work more efficiently than humans lies in the core of AI startups. After traversing through these startups, you would have realized there is no problem being solved. All these problems have existed for long, it’s just some kids believe they have the technology which can solve the problem.

If you were also thinking to solve challenging problem, think AI, who knows your idea might get noticed by YCombinator accelerator program. In this article, I discussed about the rising startup craze in AI domain and what can you learn from it.

I hope you like reading this article. Do share your suggestions / experiences of AI startups in comments below.

Looking for a job in analytics? Check out currently hiring jobs in machine learning and data science

Kunal Jain 27 Sep, 2016

Kunal is a post graduate from IIT Bombay in Aerospace Engineering. He has spent more than 10 years in field of Data Science. His work experience ranges from mature markets like UK to a developing market like India. During this period he has lead teams of various sizes and has worked on various tools like SAS, SPSS, Qlikview, R, Python and Matlab.

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Responses From Readers


Heinz 26 Sep, 2016

Hi Kunal, great post. I knew some of your candidates but there are quite a couple of interesting addons. Nevertheless, you propose to build up your own AI startup. Are you aware of any ways to participate from the success of the already existing companies? How can i some money on them? Keep the great posts rolling, Heinz

Hunaidkhan Pathan
Hunaidkhan Pathan 27 Sep, 2016

superb informative article Kunal

hari galla
hari galla 27 Sep, 2016

Great insight on the start ups

Jesse 27 Sep, 2016

AI will eventually take over because any company no matter what type, is all about making money and saving money. So if AI helps save companies money they will not hesitate to use it. I do believe though... that something bad will happen in the long run if everyone starts using them.

Surya 28 Sep, 2016

Amazing article Kunal...

Hemanth Varma
Hemanth Varma 29 Sep, 2016

Dear Kunal, That was a very informative and an eye opener for the people who are in machine learning path, but the difficulty is where to put our first step in understanding basics of AI. With your experience can you suggest us few books, blogs or any other informative source which can demonstrate us where to start with AI. Thanks for your time in advance :) Cheers Analytics Vidhya Team :)

Kusum Parjapat
Kusum Parjapat 04 Oct, 2016

Adorable article....

Cody Charles Deegan
Cody Charles Deegan 07 Oct, 2016

Being a business person is not easy. You have a lot of ideas that you want to incorporate in your business. I think that is why we have a lot of startups now.

Preeti 28 Nov, 2016

Informative Article !!