Data from Dealroom was used for the State of European Tech report. Dealroom defines deep tech as 16 fields: Artificial Intelligence, Machine Learning, Big Data, Augmented Reality, Virtual Reality, Drones, Autonomous Driving, Blockchain, Nanotech, Robotics, Internet of Things, 3D Technology, Computer Vision, Connected Devices, Sensors Technology, and Recognition Technology (NLP, image, video, text, speech recognition).

In 2019, there was $10.2 billion capital invested in European deep tech. In 2020, that dropped to $8.9 billion:

I think it’s fair to say that 2020 has been a tough year for most people and businesses. Economic uncertainty – not just from COVID-19 but also trade wars, Brexit, and a rather tumultuous US presidential election – has naturally led to fewer investments and people tightening their wallets.

For just one example, innovative satellite firm OneWeb was forced to declare bankruptcy earlier this year after crucial funding it was close to securing was pulled during the peak of the pandemic. Fortunately, OneWeb was saved following an acquisition by the UK government and Bharti Global—but not all companies have been so fortunate.

Many European businesses will now be watching the close-to-collapse Brexit talks with hope that a deal can yet be salvaged to limit the shock to supply lines, prevent disruption to Europe’s leading financial hub, and help to build a friendly relationship going forward with a continued exchange of ideas and talent rather than years of bitterness and resentment.

The report shows the UK has retained its significant lead in European tech investment and startups this year:

Despite the uncertainties, the UK looks unlikely to lose its position as the hub of European technology anytime soon.

Investments in European tech as a whole should bounce back – along with the rest of the world – in 2021, with promising COVID-19 vaccines rolling out and hopefully some calm in geopolitics.

94 percent of survey respondents for the report stated they have either increased or maintained their appetite to invest in the European venture asset class. Furthermore, a record number of US institutions have participated in more than one investment round in Europe this year—up 36% since 2016.

You can find a full copy of the State of European Tech report here.

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The fact you can add ‘AI’, ‘IoT’, or ‘blockchain’ to your company name/description and it will skyrocket your valuation has become something of a running joke in the industry. Shares in Long Island Iced Tea, for example, infamously shot up almost 200 percent after changing its parent company name to ‘Long Blockchain Corp.’

European AI startups have been similarly cashing in, according to research by London-based investment firm MMC Ventures.

MMC Ventures were unable to find any evidence of AI applications at 40 percent of 2,830 AI startups in Europe. Many, of course, do have plans to develop AI in the future.

‘Artificial intelligence’ has been used to define many things including the automation of tasks, machine learning algorithms, and complex neural networks. This has given businesses a broad scope to claim they’re using AI in some respect.

European venture capital groups pay attention when a startup claims to be using AI. Funding is between 15-50 percent higher than a typical software startup, according to MMC Ventures’ research.

However, the number of startups actually using AI is rapidly increasing. One in 12 are now using AI compared to one in 50 six years ago. 12 percent of large companies have started using AI in their business compared to just four percent the prior year.

The UK is the powerhouse of European AI, with a third of the continent’s startups. According to data from Capital IQ, European investors have doubled their UK investment over the past year.

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Venture capital firms invested a record $1.3bn (£998m) in UK-based AI companies last year.

The figures are provided by Dealroom and show a fourfold increase in five years. A couple of notable rounds includes $200 million for Graphcore in your humble editor’s hometown of Bristol, and $50 million for what feels like my second home of London.

For comparative purposes, French AI startups raised $400 million last year, while Germany raised $300 million.

But the UK is not slowing down. Business Secretary Greg Clark and Digital Secretary Jeremy Wright announced today £200 million to establish 16 new centres and deliver 1,000 new PhDs to ensure the UK leads the global revolution in AI.

Business Secretary Greg Clark said:

“The UK has long been a nation of innovators and today’s package of AI skills and talent investment will help nurture leading UK and international talent to ensure we retain our world-beating reputation in research and development.

Artificial intelligence has great potential to drive up productivity and enhance every industry throughout our economy, from more effective disease diagnosis to building smart homes. Today’s announcement is our modern Industrial Strategy in action, investing in skills and talent to drive high skilled jobs, growth and productivity across the UK.”

A £100 million investment will support these PhD students in using AI to improve healthcare, tackle climate change, and create new commercial opportunities. Over 300 partners are involved including AstraZeneca, Google, Rolls-Royce, and NHS trusts.

The private companies are investing a total of £78 million in cash or in-kind contributions, while the universities are committing a further £23 million. This brings up the investment to over £200 million.

Digital Secretary Jeremy Wright commented:

“The UK is not only the birthplace to the father of artificial intelligence, Alan Turing, but we are leading the way on work to ensure AI innovation has ethics at its core. We want to keep up this momentum and cement our reputation as pioneers in AI.

Working with world-class academic institutions and industry we will be able to train the next generation of top-tier AI talent and maintain the UK’s reputation as a trailblazer in emerging technologies.”

Despite the national doom and gloom over Brexit, foreign investment keeps flowing into talented startups which may become the next DeepMind.

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The chip giant is specifically looking at startups building on-device AI technologies. We’re increasingly seeing NPUs (Neural Processing Units) debuting in the latest devices, so it’s little surprise to see Qualcomm seeking to fund technologies which may provide an edge.

Steve Mollenkopf, CEO of Qualcomm Incorporated, said:

“At Qualcomm, we invent breakthrough technologies that transform how the world connects, computes, and communicates. For over a decade, Qualcomm has been investing in the future of machine learning.

As a pioneer of on-device AI, we strongly believe intelligence is moving from the cloud to the edge. Qualcomm’s AI strategy couples leading 5G connectivity with our R&D, fueling AI to transform industries, business models, and experiences.”

Qualcomm has made AI investments through its evergreen venture fund in the past, including in China’s facial recognition darling SenseTime.

SenseTime became the most funded AI startup in the world earlier this year, with a reported valuation of over $3 billion.

The company’s facial recognition and video analysis technologies are used by the Chinese government and the company is aiming for its ‘Viper’ system to be able to process and analyse over 100,000 simultaneous real-time streams from traffic cameras, ATMs, and more to automatically tag and keep track of individuals.

Some other AI investments made by Qualcomm include General Motors-owned autonomous driving firm Cruise, and Tel Aviv-based AnyVision who are developing face, body, and object recognition technology.

 AI & >.

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