Venture capital investment volume and value continued to flow into the AI technology space in 2019, though the number of big deals dropped globally. Namely, 2019 passed without any billion-dollar deal values, while 2018 had one VC deal worth at least $1 billion.
That’s according to a new report from data analytics company Global Data, which tracked 2,018 VC funding deals worth $31.8 billion in the AI tech space last year.
While the number of VC funding deals rose from 1,627 in 2018, the overall value of the deals wasn’t too different. The 2018 deals came to $30.7 billion, by comparison. Deal volume grew 25% year to year, while deal value only rose 3.6%, meaning more smaller deals were reported in 2019.
From 2018 to 2019, the average deal size dropped from $18.9 million to $15.8 million. Year-over-year there were fewer “big-ticket VC deals” reported, according to GlobalData. The number of VC deals worth $100 million or more dropped from 64 in 2018 to 60 in 2019. In addition, the proportion of these mega deals compared to total deal volume dropped, from 3.3% in 2018 to 2.2% in 2019.
The biggest drop in these large deals of $100 million or more came from China, with only 10 deals crossing this threshold, worth a total of $2.1 billion. In 2018, China reported 26 deals of this size, totaling $6.9 billion. The U.S., in contrast, saw a rise in big deals, with 37 $100 million-plus deals totaling $8.5 billion in 2019, compared to 31 deals in 2018, totaling $6.2 billion.
“While the VC investors remained cautious in committing big ticket investments in China due to its trade tensions, slowdown and mounting debt, the U.S. was the savior and remained the undisputed leader in VC fund-raising for AI-start-ups,” GlobalData Lead Analyst Aurojyoti Bose said in a statement. “Though VC funding activity in China was initially expected to rebound during 2020, it would be interesting to see how the situation unfolds post the coronavirus outbreak.”
At the same time, the share of low-value deals rose to 70% of total deal volume in 2019, compared to 67.7% in 2018.
The report comes after other data shows a slowdown of digital health funding in 2019.
Some recent AI funding deals include: