PRNewswire

As AI continues to reshape industries globally, Code B’s report highlights funding trends that underscore technology’s evolving role in business innovation, from early-stage startups through to mature companies preparing for an IPO.

Since the advent of transformative models like ChatGPT-3.0, the AI ​​investment landscape has changed significantly, particularly for sectors like automation and information technology.

As early adopters, these industries are now joined by smaller industries, increasingly reliant on machine learning and artificial intelligence models, either directly in their products or in business processes.

Investment models in AI financing in 2024

Analyzing funding data from Crunchbase and Apollo.io, Code B research focused on direct funding rounds through May 15, 2024. Methodical data cleaning and rigorous exclusion of secondary investments clearly show how the Funding has a direct impact on AI companies.

Key findings include:

Startup funding

Among all investment rounds in AI-focused companies, 26% of total funding went to “seed-stage” rounds, indicating strong interest from the investment community in innovating with models machine learning in a commercial context.

Series A Funding Dominance

Among all AI-focused companies that secured funding, 30% of them raised their Series A, reflecting strong interest in developing early-stage AI innovations.

These funds enable startups to scale their products and establish sustainable business models, often optimizing resources by leveraging offshore development options.

B and C series for scaling

Midstream funding in AI, covering 15% in Series B and 7% in Series C, indicates growing interest among global investors in finding the perfect product-market fit for companies that can demonstrate a clear business case for AI. AI. These cycles support market expansion and workforce growth, often in collaboration with companies specializing in outsourced AI projects to maximize operational efficiencies.

Late maturity (series D and E)

Only 3% of the amount funded went to companies raising their Series D, while 4% progressed to Series E, meaning companies in advanced stages of funding, often preparing for IPOs or completing strategic acquisitions.

These mature companies are typically those transforming their business processes to improve internal capabilities and build a more robust offering by leveraging new AI technologies.

Funding amounts in these cases will be almost entirely dedicated to integrating machine learning models, either by developing a team in-house or by offshoring technical development to countries like India, Philippines, Ukraine , etc.

Equity crowdfunding is gaining ground

Equity crowdfunding, which represents 12% of AI funding, is increasingly favored by start-ups looking for a democratized financing approach to accelerate their development at lower cost.

Scarcity of private equity

Only 0.9% of AI companies have received private equity, reflecting the relatively nascent stage of the sector, with most AI companies still relying on venture capital or crowdfunding for growth.

A word from the Founder

Riddhesh Ganatra, founder and CEO of Code B, highlighted the evolving AI investment landscape, observing that Series A funding lays a strong foundation for emerging companies, while subsequent funding rounds indicate a trajectory towards long-term growth. He explained that Code B’s mission is to provide investors with data-driven insights that help them distinguish authentic AI innovation from overvalued companies.

Methodology and rigorous data verification

The Code B report combines proprietary data from Crunchbase and Apollo.io and in-depth analysis of company websites, press releases and LinkedIn pages. This approach ensures that only companies actively engaged in AI are included, removing those that use AI-related keywords simply for hype purposes.

About Code B

Code.b.dev specializes in high-quality web and mobile application development, cloud computing solutions and DevOps consulting, with a focus on specialist outsourcing and offshoring expertise. Our team delivers guaranteed digital experiences, optimal cloud infrastructures, and efficient development pipelines designed to drive global growth and innovation.

For more information or to access the full report, please contact:

Riddhesh Ganatra,

Founder of Code B,

[email protected]

+91 9137595718

Code-b.dev.

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