Eastern Asia’s AI Industry: Top 20 Seed Funding Investors in Recent Years

Intro

Artificial Intelligence is a frontier research discipline, which deals with building computerized systems that perform tasks requiring human intelligence. Already utilized by numerous companies, such technologies as facial, speech, and image recognition, NLP, visual search, and machine learning are predicted to conquer even conservative industries worldwide, exposing 33.22% annual growth between 2020 and 2027.

The attractiveness of the industry is proven by the intensity of investments in this field. With reference to the KPMG report, OutsideInsight claims that the amount of money put into AI, ML, and RPA (robotic process automation) will increase dramatically in the nearest future, reaching more than $230B by 2025. In Eastern Asia only, startups connected to AI received 301 million US dollars of seed funding, which is slightly under 1% of the total capital raised in this region’s AI industry over the last two years. 20 most active investors with the most considerable sums of money put in seed funding are featured on the following diagram follows:

Eastern Asia’s AI Industry: Top 20 Seed Funding Investors in Recent Years
data provided by Unicorn Nest

Key takeaways

• Funds Geography – The majority of the funds that actively invest in the Artificial Intelligence industry are based in China (12 out of the top 20 firms). Another popular location is Japan, where Tokyo is home to six VCs, and South Korea. Chinese funds come mostly from Beijing, Xuhui, and Shanghai. Most frequently, the funds invest in the startups from their country of origin, so the major amount of money is attracted by Chinese projects. The VCs from the sample also tend to put money in startups from Japan, the US, and South Korea.
• Industry Focus – Typically, the listed funds invest in Finance projects, with startups in Autonomous Vehicles, Manufacturing, and Hardware/Electronics following. Examples of such startups could be Energy Monster (China), Stori Card (Mexico), and Bitsensing (South Korea).
• Important Years – With a 34-year gap between them, the oldest and the newest funds, Chibagin Capital and UB Ventures, were established in 1984 and 2018, respectively. The majority of the companies listed were founded in 2008. For nine VCs, 2018 was the year when the most deals were closed. Other fruitful years are 2016, 2019, and 2020. Overall, the greatest number of successful exits were performed in a period between 2009 and 2020 years. For some funds, this happened in 2016.
• Investments – Although the VCs listed usually participate in 7-12 rounds per year, this figure is reduced to just two rounds yearly for some funds.  The average number of funding rounds reaches 147.4, with a median of 116.5. The minimum numbers of common and lead investments are 15 and 0, the maximum numbers – 687 and 113, respectively. On average, funds become lead investors 26.3 times, with a median for that number being 20.5. Most commonly, the companies from the list participate in 15 funding rounds and act as lead investors once. Index of difference between lead investments and the average, given in percentage points, falls between -8.25 and 29.0. The average value for this difference is 9.66, and the median is 7.8, meaning that some funds from the sample, like ZhenFund or Hillhouse Capital Group, become lead investors more often than the rest.
• Typical Rounds – Generally, VCs from the list have 3-4 investors per round participating, with a round size being less than 100 thousand US dollars. Less often, there are 2-3 partakers and size in the range of 5-10 million. According to the last known valuation data, the minimum and the maximum multiplicators for portfolio companies are 0.0 and 303000000.0, respectively, with an average value for this indicator reaching 27815789.61. The median for the multiplicators is 0.06, and the most common multiplicator is 0.0.

In summary, the most active seed investors in Eastern Asia’s AI industry usually participate in 7-12 rounds yearly, each having 3-4 partakers and sized at less than 100 000. More than half of the top 20 funds come from China; others are based in Japan and South Korea. The most fruitful years, which are 2016, 2019, and 2020, indicate that the VCs still consider this industry attractive and worth taking the risk.