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Alternative Market Briefing

Venture capital deal value in artificial intelligence boast CAGR of nearly 40% last 5 years

Friday, March 05, 2021

Laxman Pai, Opalesque Asia:

Venture capital (VC) funding and mergers and acquisitions (M&A) activity in the artificial intelligence (AI) space showcased a fluctuating trend during 2016-2020, said a report.

However, despite the fluctuation in deal activity, there is a significant growth in 2020's deal volume and value compared with 2016, it said.

According to GlobalData, there is a notable growth when comparing 2020 numbers with 2016. VC deal volume and value increased at a compound annual growth rate (CAGR) of 19.4% and 39.9%, respectively, during 2016-2020.

"VC funding deal volume in the AI space showed consistent growth from 2016-2019 until 2020 when the COVID-19 pandemic reversed the trend and deal volume shrank by 7.1%. However, funding value managed to maintain the growth trajectory," the report said.

VC deal volume in the AI space shrank by 7.1% from 3,075 in 2019 to 2,856 deals in 2020. Despite the decline in volume, the COVID-hit 2020 saw the announcement of some big-ticket VC deals due to which deal value increased by 18.7% compared to 2019.

Some of the notable VC deals announced during 2020 included US$1.9bn secured by SpaceX and US$1.7bn secured by Manbang Group.

On the other hand, M&A deal volume registered consistent growth during 2016-2020, while M&A deal value continued to fluctuate. After recovering from the decline in 2017, M&A deal value registered growth in 2018 and 2019 before declining again in 2020.

According to the report, M&A d......................

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