ASSETS SAYS HAMPLETON PARTNERS’ LATEST M&A MARKET REPORT
Machine Data Analysis companies in highest demand with half of all deals
London –The world’s major IT players – Google, Apple, Microsoft, Intel, Facebook, Twitter and Salesforce – are racing to invest in, acquire and absorb cutting-edge artificial intelligence start-ups and scaleups, according to Hampleton Partners’ latest Mergers & Acquisitions (M&A) Market Report on Artificial Intelligence, published today.
Machine Data Analysis
Hampleton Partners, the international technology M&A advisory firm, reveals that the three key AI sub-sectors: machine data analysis; natural language processing and machine vision, have all shown impressive growth rates over the past 24 months, but it is the machine data analysis category that is attracting most buyers, with half of all deals (49 percent).
The largest deal in machine data analysis in the first-quarter 2018 was Roche’s acquisition of Flatiron Health for $1.9 billion. This oncology-focused electronic medical records (EMR) company’s value lies in its ability to capture unstructured data and combine it with EMR to generate real-world evidence.
Machine data analysis includes business and data analytics, forecasting models, big data machine learning, statistics recognition and predictions.
The next biggest sector for AI-acquisitions is Machine Vision, with 31 per cent of deals over the past 24 months. Video and image recognition and analysis are expanding into many sectors, from advertising to robotics and from physical security to healthcare analysis.
One active acquirer in this sector is Chinese tech giant Baidu, acquiring US start-up xPerception to help build its autonomous driving and augmented reality efforts, through object recognition and depth perception technology.
AI market size and 1Q 2018 deals
Overall, the number of artificial intelligence-related M&A deals has shown impressive growth year-on-year. Particularly encouraging for the long-term growth of the sector and future exits is the level of VC investment with venture-backed early-stage AI companies securing more than $1.9 billion in just the first-quarter of 2018. These investments focused particularly on robotic automation, autonomous vehicles (AV) and predictive analytics.
European acquirers are in a strong position moving forward in the AI sector, with a rise of all European targets being acquired by intracontinental buyers from 38 per cent in 1H 2017 to 44 per cent 1Q 2018. The high number of European M&A deals is a testament to Europe’s competitiveness in AI technology and recent commitments by national governments to back AI development further, augurs well for the sector as overall AI market size is forecast to grow from $21.46 billion in 2018 to $190 billion at a CAGR of 37 per cent. (1)
Heiko Garrelfs, director, Hampleton Partners, says: “It’s revealing to see that machine data analysis companies are being targeted most heavily by buyers, with the first quarter 2018 outperforming the first half of 2017. The IT giants fully understand the importance of AI to data analysis, enabled by massive data sets and cheap, readily available and scalable computing power that are combining to change their businesses fundamentally
“This promises a future exemplified by persistent, aggressive AI acquisitions by tech giants. A direction made clear recently by Google CEO Sundar Pichai, who now calls Google an “AI first” company and claims that AI will do more for humanity than fire or electricity. That means that AI will create new opportunities across all sectors, driving the next stage of global growth.”
Download the full Hampleton Partners AI M&A Market Report here for free: