To go further, read our Q2 2022 Report on Artificial Intelligence and Machine Learning. PitchBook subscribers can also explore full market map with details of nearly 6,000 companies.

Spotlight on: Horizontal Platforms

Horizontal platform businesses fall into four sub-segments:

  • Core AI: The building blocks of AI and machine learning deployments. This subsegment includes the development tools needed to create and deploy models in production.
  • Computer vision: Technology that uses AI and machine learning to analyze, label and make predictions about visual data.
  • Natural language technology: Technology that uses linguistic techniques to learn from communication data and make predictions about the structure and content of language.
  • AI Automation Platforms: Software and services that enable businesses to use AI to automate critical processes through predictive analytics.

How offers and releases evolve

In Q2 2022, there were 1,340 AI and machine learning venture capital deals worth a total of $20.2 billion, down nearly 28% quarter-on-quarter. the other and the second consecutive quarterly decline.

According to PitchBook analyst Brendan Burke, funding has fallen even deeper in AI and machine learning than in software overall.

The horizontal platforms sub-segment has seen an investment lag as revenue projections failed to materialize, with investment in AI as a service on track to decline 87.7% in 2022, Burke said.

Despite this continued decline, there were a few notable deals in the quarter, including a $225 million Series A for AI platform developer Inflection, $210 million for cloud messaging security platform developer Abnormal Security and $150 million for cloud-based data integration technology developer Matillion.

Exit activity is also slowing, with the number of transactions down 21.8% quarter over quarter, while exit value remained flat. As it stands, with 228 releases worth $28.2 billion so far this year, 2022 should be well below the totals posted in 2021.

Even with the recent slump, SPAC mergers continued to close in the second quarter as Pagaya, Eve and Soundhound went public. Acquisitions announced at the start of the recession also closed, including Snowflake’s acquisition of Streamlit for $800 million and Software AG’s purchase of Streamsets for $584 million.

The shutdown of mega-releases demonstrates the enduring value of advanced data analytics software, even in times of economic volatility, Burke noted.

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