What’s common among the Top 50 AI Companies?
As soon as Jillian published her article on America’s Top 50 AI Companies yesterday on Forbes.com, I’ve been itching to analyze them and see what they have in common. Finally I was able to sneak out for an hour this morning and crunch some numbers, and here’s what I found…
Given that companies in the list have been sorted based on their current valuation, I figured if I could generate a word cloud of the top few companies, that would give me some idea as to what’s common among them.
Turns out the top 6 companies that account for over half of the overall 7bn in funding are focused primarily on Autonomous Vehicles and supporting services such as Insurance and Artificial Intelligence Platforms.
However, as an Entrepreneur turned Investor, I wanted to flip this and look at it from a different perspective. If I was looking to invest in a startup, what should I look for? In order to answer this question, it’s not enough to look at the Valuation by itself.
What I really want to know is what industry would give me the biggest bang for my buck? So, I decided to calculate the Valuation to Funding Ratio for each company, and use that as the basis for the rest of my analysis.
As soon as I switched the underlying metric to this new Valuation to Funding Ratio (V/F Ratio), many interesting insights popped up.
Illinois and Texas show a much higher average V/F Ratio of 6–9x compared to California and New York at ~ 3x. All I’m saying is don’t underestimate the innovation potential in these parts of the country.
Anduril Industries has the highest V/F Ratio at 17.09, which is definitely an anomaly, but conceivable given their focus on VR for Government Security applications.
Next comes Uptake, Verkada, and Feedzai. Uptake focuses on AI for security in equipment maintenance; Verkada applies visual recognition to security camera data for student safety and delivery tracking; and Feedzai fights fraud and money laundering via AI.
This was the ‘aha’ moment…
The top 4 companies with highest Valuation to Funding Ratio are all focused on the application of AI to Security.
In summary, even though Autonomous Vehicles, Insurance, and AI Platforms have the highest valuations, AI applications to Security have a higher potential rate of return for investors.
For more insights, checkout the dashboard…