AI Funding Weekly - July 29th 2023

AI funding delivered fresh to your inbox weekly(ish)

I’m experimenting a bit with which day I’m going to send this newsletter. So far I’ve tried Monday, I’ve tried Thursday, and now we’re taking Saturday for a spin. My thinking is everyone is so busy during the week, maybe the weekend could be a better time to sit down and digest some data about AI funding.

At the same time, maybe people don’t want to think about AI or funding on the weekend, so I could be completely wrong here. As usual, I’ll let the data do the talking and tell me if this is a move in the right direction or not.

While AI funding continues to be a highlight in the global funding ecosystem, it hasn’t created enough momentum to reverse the overall slowdown in Venture funding. Here’s a highlight from Crunchbase with some tasty numbers to digest:

Startup investors globally continued to scale back their pace in the second quarter of 2023 despite large funding and M&A deals in the artificial intelligence space.

Global venture funding in Q2 2023 fell 18% quarter over quarter to $65 billion, Crunchbase data shows. That’s down 49% compared to the second quarter of 2022, when startup investors spent $127 billion.

The first half of 2023 is down by similar proportions. In H1 2023, global funding reached $144 billion, marking a 51% decline from the $293 billion invested in H1 2022 and a 10% decline from the second half of 2022. (Source - Crunchbase)

There’s no way not to find these numbers sobering, we’re talking about a roughly 50% drop in dollars flowing into startups in Q2 2023 when compared with Q2 last year 🤯

So while reading my weekly newsletter might make you think that VCs are writing checks left and right, that’s not quite the case right now, unless your a hot AI startup, then the sky still seems to be the limit.

And on that note, let’s get to the good stuff - here’s three AI startups that just added more fuel to the rocket ship 🚀

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AutogenAI - $22.3M

Less than a year old, AutogenAI has now raised over $25M total after bringing 28 clients onboard in such a short period of time. So it’s safe to say product-market fit came quickly.

The fresh round of funding was led by Blossom Capital and is going towards increasing headcount, expanding their platform, and of course - bringing on more customers.

So what does AutogenAI do? In a nutshell, they help companies craft pitches for things like client proposals by leveraging publicly available LLMs like ChatGPT along with a company’s own structured and unstructured data.

Currently the company touts an estimated 800% increase in speed when it comes to writing a strong pitch so it’s no surprise they’re growing as fast as they are. What I think makes this company so unique is that it blends both publicly available large language models with brand-specific data to create something unique to that specific company - a role humans have historically done manually, until now.

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ProtectAI - $35M

On Wednesday, ProtectAI, a startup building tools to, you guessed it, protect other AI startups raised a nice $35M Series A round led by Evolution Equity Partners.

The funding comes less than a year after it raised it’s Seed round bringing the startups total funding to $48.5M. With the fresh funding, CEO Ian Swanson plans to grow the team from 25 people to 40 and give them more than enough money to weather whatever storms may be ahead.

While there haven’t been major issues with attacks on AI systems to-date, Swanson thinks it’s only a matter of time until this becomes an issue, and when it does, ProtectAI will be uniquely positioned to be a core player in the AI defense space.

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Effectiv.ai - $4.5M

Fraud and risk management is a space that is seeing a lot of disruption thanks to AI and Effectiv is moving one step closer to being a key player in the space with a nice healthy $4.5M Seed Round.

The company claims to provide an 80% reduction in manual work for fraud and risk operation teams and has already processed over $20B in automated risk and fraud decisions.

With the new funding, Effectiv plans to expand its product offerings across new geographies. Thanks to backing from VC giant Accel, who already was already an investor prior to this round, it’s safe to say there’s a strong foundation for Effectiv to build off of.

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And that’s a wrap for this week, thanks for reading and have a great weekend!