Venture Capital in AI & Data Technologies
Total Page:16
File Type:pdf, Size:1020Kb
1 Venture Capital in AI & Data Technologies Mid Year Review 2020 GLOBAL TECH INVESTMENT BANKING VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 v 2 Contents 2 DataTech Overview • ICON’s DataTech Compass • Key Insights DataTech • DataTech Stack • Detailed Market Segmentation 6 Financing Trends • Robust Financing Overview • Trends in Transaction Sizes • Total Raised By Sector By Year 10 Investor Review • Most Active Investors • Select CVC Activity – 1H20 13 Select Recent Financings • CVC Highlights 16 Valuation Analysis 18 About ICON Corporate Finance • Deep Experience • Global Transaction Record • Select Transaction Experience GLOBAL TECH INVESTMENT BANKING VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 3 ICON’s DataTech Compass Identify Strategic Opportunities. Leverage Competitive Dynamics. Achieve Execution Advantage. Data-driven advice for a data-driven industry – ICON’s DataTech Compass is a curated, proprietary data platform utilized to achieve optimal results. Company & Transaction Database Proactive & Proprietary Analysis VC, CVC & PE Trends > 3,900 M&A Transactions By • Firm-specific Investment Analysis • Breakdown By Size & Valuation > 2,500 Acquirers Acquirer Appetite Analyses > 2,10 0 VC Financings From • Product Gap Analysis • Strategic Opportunity Review > 1,900 Investors Hyperdetailed Categorization > 1,350 Companies In • Identifies Competitive Dynamics • Vendor Financial Sizing > 140 Sectors VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 ICON’s DataTech Compass is continuously updated; data contained in this report will adjust over time. 4 Key Insights DataTech Stack Datatech Investment Remains Strong Survey after survey continue to show insatiable customer Data Apps demand for data-driven tools. Venture investors continue Industry Apps to fund this trend. The average round size for DataTech Functional Apps companies hit an all time high in the first half of 2020. Source: Sierra Ventures CXO Survey The AI Age Is Upon Us Having an AI angle has become nearly a prerequisite for Analytics DataTech companies seeking venture capital—that means AI & Advanced Analytics either incorporating or enabling AI & ML. Specialized financial Marketing Analytics and strategic investment funds have formed or maneuvered in Reporting & Visualization recent years specifically to target AI opportunities. VCs Mitigating Risks Governance Whereas previously a single VC would seek to take as much of a compelling round as possible, they’re now open to more of Data Management a syndicate approach to reduce risk during uncertain times. In Data Security fact, the average number of investors in a round hit a new high Data Providers Source: ICON research, Capital IQ in 1H20. Process management is critical. It’s A Marathon Infrastructure Raising venture capital has always been time consuming, but with current global challenges Databases presenting once-in-a-lifetime barriers, startup CEOs should prepare for a marathon, not a Performance & Optimization sprint. Market knowledge, messaging, relationships, and again, process management, are Query Engines critical to closing financing in an efficient manner. VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 5 Detailed Market Segmentation INDUSTRY APPS FUNCTIONAL APPS Accounting CPG Gaming Manufacturing Retail Contact Center Networking Advertising Credit Geopolitical Materials Shipping Customer Support Pricing Analytics Agriculture Defense Government Mining Sports Drone Data Product Aquaculture eCommerce Healthcare Oil & Gas Supply Chain Economics Risk DATA APPS Automotive Education Hospitality Pharma Telecom Fraud Sales Autonomous Driving Energy Industrial Public Safety Traffic HR Security Cities Farming Insurance Railroad Transportation IT Smart Buildings Civic Finance IT Real Estate Utilities Loss Prevention Supply Chain Commercial Real Estate Food Legal Regulatory Marketing Translation Construction Forestry Logistics Research AI & ADVANCED ANALYTICS MARKETING ANALYTICS REPORTING & VISUALIZATION AI Model Ops Real-Time Content Analytics Behavioral Analytics Mobile Analytics BI ANALYTICS Computer Vision Collaborative Analytics Programming Languages Semantic Analytics Churn Analytics Social Analytics BI Platform ML Platforms Log Analytics Sound Recognition Customer Data Platform VoC Embedded Analytics AutoML Predictive Geo Analytics Optimization/Solvers Journey Analytics Web Analytics CPM CX Analytics Interactive Visualisation DATA MANAGEMENT DATA SECURITY DATA PROVIDERS GOVERNANCE Archiving & Recovery DataOps Metadata Mgmt Data Sharing Data Loss Prevention Data as a Service Data Extraction Data Catalog Data Integration Data Prep Training Data Data Discovery & Privacy Data Exchange Web Scraping Data Quality Master Data Mgmt Search Platforms Data Encryption DATABASES PERFORMANCE & OPTIMISATION QUERY ENGINES INFRASTRUCTURE Edge Computing In Memory SQL/SQL-on-Hadoop Performance Access Data Virtualization Graph NoSQL & NewSQL Time Series IMDG Data Lake Data Warehousing VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 v 6 Financing Trends GLOBAL TECH INVESTMENT BANKING VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 7 12 50 Robust $46.4m Financing 45 10 40 • Despite global turmoil, financings for $46.6bn data technologies companies have TOTAL RAISED $35.7m remained resilient. 35 • In the first half of this year, DataTech 8 companies collectively raised $4.82bn. On an annualized basis, that’s nearly the same amount as was 30 raised last year. $26.7m • Perhaps most notable, the average $27.7m round size hit an all time high of 6 25 $46.4m. In the first half of 2020, 13 $23.2m companies raised rounds of $100m Average Size ($m) Average or more, the same amount as did so Raised ($bn) Total in 1H19. 20 • Palantir’s $500m and Snowflake’s $479m rounds on their own 4 $15.4m accounted for one-fifth of the total $14.5m 15 amount raised in the first half of the year. $11.4m $9.9m $12.9m 10 2 $10.6m 5 $0.4bn $0.7bn $1.0bn $1.9bn $2.5bn $5.3bn $3.3bn $7.1bn $7.8bn $10.4bn $4.8bn 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H2020 Total Raised $bn Average Size $m VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 As of June 30, 2020. Excludes rounds of ≤ $1m & undisclosed values; excludes public companies taken private. Source: ICON research, Capital IQ, Company reports 8 Rounds Announced Trends In 100% Transaction 90% Sizes 80% 70% • Late stage mega rounds continued to account for a growing share of the total number of rounds announced, while the number of earlier stage 60% investments continued to decline as a percent of total number of investments. 50% • Early stage financings favored analytics companies, with those vendors accounting for more than half of announced rounds up to $10m. 40% • In rounds of ranging from $10m to $50m, analytics companies accounted for just under one-third 30% of total financings. Data driven applications companies raised nearly half of these rounds. 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H2020 >1m to 10m >10m to 30m >30m to 50m >50m to 100m >100m VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 As of June 30, 2020. Excludes rounds of ≤ $1m & undisclosed values; excludes public companies taken private. Source: ICON research, Capital IQ, Company reports 9 Total Raised By Sector By Year $10bn $8bn $6bn $4bn $2bn $0bn 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H2020 Infrastructure Governance Analytics Data Apps VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 As of June 30, 2020. Excludes rounds of ≤ $1m & undisclosed values; excludes public companies taken private. Source: ICON research, Capital IQ, Company reports v 10 Investor Review GLOBAL TECH INVESTMENT BANKING VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 11 Most Active Investors Infrastructure Governance Analytics Data Apps VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 As of June 30, 2020. Excludes rounds of ≤ $1m & undisclosed values; excludes public companies taken private. Source: ICON research, Capital IQ, Company reports 12 Select CVC Activity– 1H20 • A perfect recipe of strong balance sheets, digital transformation trends, and the technology industry’s continued growth has led many large companies to launch corporate venture capital (CVC) groups. • The tech and finance industries are among the most active CVC investors, though corporates from myriad industries, such as industrials, telecom, and pharma, invested in DataTech. • All time, more than 140 strategic investors have made at least one investment in a data technologies company. In the first half of 2020, Includes only select investments announced in the first half of 2020. Source: ICON research, Capital IQ, Company reports more than 30 strategic investors made at least one DataTech investment. • Google, through its various venture NUMBER OF INVESTMENTS WITH 120 arms, was the most prolific strategic AT LEAST ONE CVC INVESTOR investor. 80 40 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20 VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 As of June 30, 2020. Excludes rounds of ≤ $1m & undisclosed values; excludes public companies taken private. Source: ICON research, Capital IQ, Company reports v 13 Select Recent Financings GLOBAL TECH INVESTMENT BANKING VENTURE CAPITAL IN AI & DATA TECHNOLOGIES – MID YEAR REVIEW 2020 14 Data Apps Analytics Governance Select Recent Financings Infrastructure ANNOUNCED COMPANY SUBSECTOR INVESTORS