The Artificial Intelligence (AI) sector saw exponential growth in last year’s funding. Does its exit activity trend correspond with the growth in funding? On our AI research platform, we have analyzed the data through 2017 and can conclude that AI exit activity is also seeing very robust growth over time.
This observation was derived from two takeaways:
- AI exit activity exploded at the annual level
- Quarterly AI exits also saw healthy growth
We’ll illustrate these takeaways with two graphics that show AI exit activity trends over the years.
AI Exit Activity Exploded in Recent Years
Let’s start off by examining the AI exit events from 2011 to 2017. Exit events include both acquisitions and IPOs. The below graph highlights the number of annual AI exits stacked by quarters.
This graph illustrates that AI exit activity is skyrocketing. Specifically, the number of exits in 2017 was 175% of that in 2016. Additionally, the CAGR from 2012 to 2017 is 38%.
Let's now see how the exit activity trends look at the quarterly level.
Quarterly AI Exit Activity Seeing Healthy Growth
Let’s now look at the graph of AI exit events by quarter.
The above graph shows that AI exit activity is on an upward trend for most quarters. It’s particularly notable that the last 7 quarters have seen 10 exits or more in each. This is rather unprecedented and really shows the new exits momentum of the sector.
Conclusion: AI Exit Activity Is Bullish
In summary, we can conclude that AI companies are getting acquired and going public at an increasing pace over time--both at the annual and quarterly levels. This correlates with the exponential growth in its funding in 2017. It’ll be interesting to see if this trend continues in 2018.
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