Thirty five UK start-ups have now applied to Capgemini’s InnovatorsRace50, a global competition for early-stage start-ups that offers $50k of equity free funding to a winning idea, including a number of companies that are looking for practical applications of artificial intelligence (AI). With a surge in AI-related venture capital investments in 2016, Rob Kniaz, co-founding partner of Hoxton Ventures, explains what’s happening:
“The surge was based on the advances in open-source software, which powers a lot of AI. These building blocks are progressing massively due to the efforts of companies like Google and Amazon, and the rest of the world is able to build on top. It’s been a breathtakingly fast year of progress that shows no signs of slowing.
“I think absolutely the surge will continue to grow in 2017. We’re quite excited. We’ve only scratched the surface of which industries will be affected by machine learning and artificial intelligence. It’s very similar to mobile — now it’s almost taken for granted that something is mobile. It’s early stage, but if you look at the trend, AI’s going to be pervasive. Over time, you’re not going to think about AI — these concepts will be threaded into everything. It’s going to be everywhere.
Apart from AI and machine learning, which other tech sectors are becoming popular with investors?
“On the hardware side, battery technology is interesting — you can fit things in smaller and smaller batteries. Something that was the size of a car battery, five or 10 years on is the size of a watch battery. These are general trends — miniaturisation and better software. Software companies will be a pretty interesting sector, including software as a service (SaaS). We’re seeing great companies building software to sell online. Cyber security is a very active sector; there are so many things happening. Companies that never needed to think about security, they need to think about how to protect their computers in some way.”
At what stage of development of a start-up should investments ideally be made?
“We usually hit right around Series A. Usually there’s something tangible produced — a working version of the software, between four and 10 people in the company, quite early. A lot needs to be done, but we can see that spark. There’s always a lot of miracles that have to happen: you have to sell it, it has to be popular. If you can suspend disbelief, is this a good product? If these things can happen, this could be a big company; you want to be part of it now.”
What will you be looking for in a winner of Capgemini’s InnovatorsRace50?
“I’m most interested in companies that can be breakout global winners – those who are looking to solve large problems or disrupt existing large markets. Start-ups have to shoot for very ambitious outcomes, not just local or regional wins!”
Apply until 28 February to take part in the InnovatorsRace50.