Artificial intelligence is a sector that attracts big investor checks: Q2’20 saw $7.2B in funding, despite a 12-quarter low in AI deals. Our definition of AI companies includes not just SaaS companies, but also companies using AI as a core differentiator for their main product offering. It is also including insurtech company Lemonade’s recent public offering and Roche's massive acquisition of cancer tech company Flatiron Health.
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The industry has also seen its share of eye-popping exits. Even amid the Covid-19 pandemic, AI-powered companies like Lemonade and Zoox have garnered billion-dollar exits, with a $1.6B IPO and a $1.2B acquisition, respectively.
We take a close look at AI-powered companies with exits valued at $1B+. The pace of massive exits like these has been on the rise: since 2013, 14 AI companies have exited at valuations of $1B+ — of those, 8 have taken place in 2019 and 2020 alone. We consider first exits only.
|BILLION-DOLLAR AI EXITS|
|Company||Valuation at exit ($M)||Exit type|
|Flatiron Health (US)||2,125||M&A (Roche)|
|Habana Labs (Israel)||2,000||M&A (Intel)|
|Cylance (US)||1,400||M&A (Blackberry)|
|Cray (US)||1,300||M&A (Hewlett Packard Enterprise)|
|Zoox (US)||1,200||M&A (Amazon)|
|Shape Security (US)||1,000||M&A (F5 Networks)|
CrowdStrike is the highest-valued exit on the list. The California-based enterprise cybersecurity company went public on the NASDAQ at a valuation of $6.7B in June 2019.
The highest-valued M&A deal is cancer-focused healthcare startup Flatiron Health. Swiss pharma giant Roche Holding acquired the company in early 2018, valuing it north of $2.1B.
Nine companies on our list reached unicorn valuations prior to exiting: NIO ($5B), Zoox ($3.2B), CrowdStrike ($3B), Cambricon ($2B), Lemonade ($2B), Mobileye ($1.5B), Flatiron Health ($1.3B), Avast ($1B), and Shape Security ($1B).
Auto is a popular focus for several companies on our list. NIO and Zoox both focus on autonomous vehicles, while Mobileye develops advanced driver assistance systems.
Cybersecurity is another emerging area of focus, especially in the last few years: in addition to CrowdStrike, antivirus software maker Avast went public in May 2018. Cylance and Shape Security were acquired for $1.4B and $1B, respectively.
As AI requires greater computing power, chip manufacturers are also increasingly in demand. China-based Cambricon and Israel-based Habana Labs both build AI chips, while Canaan specializes in crypto mining rigs and Cray focuses on supercomputers.
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