MUMBAI, India, Oct. 30, 2024 -- Code B, a full-service software development firm, has published an in-depth report on the AI funding landscape in 2024. The report reveals critical insights into investment patterns across various stages and sectors.

As AI continues to reshape industries globally, Code B's report highlights funding trends that underscore the technology's evolving role in business innovation, from early-stage startups to mature companies gearing up for IPOs.

Since the advent of transformative models like ChatGPT-3.0, the AI investment landscape has shifted significantly, especially for sectors like automation and information technology.

As early adopters, these industries are now joined by smaller sectors increasingly dependent on machine learning and artificial intelligence models either directly in their products or within business processes.

Investment Patterns in AI Funding in 2024

Analyzing funding data from Crunchbase and Apollo.io, Code B research focused on direct funding rounds up to May 15, 2024. Methodical data cleaning and a rigorous exclusion of secondary investments clearly show how funding directly impacts AI companies.

Key findings include:

Seed Funding

From all the investment series into AI-driven companies, 26% of the total funding went towards "seed stage" rounds indicating a strong interest among the investor community to innovate with machine learning models in a business context.

Series A Funding Dominance

Of all the AI-focused companies that secured funding, 30% of them raised their Series A, reflecting a robust interest in developing early-stage AI innovations.

These funds allow startups to scale their products and establish sustainable business models, often optimizing resources by leveraging offshore development options.

Series B and C for Scaling

Mid-stage funding in AI, covering 15% in Series B and 7% in Series C, indicates a growing interest among global investors to find the perfect product-market fit for companies that can demonstrate a clear business case for AI. These rounds support market expansion and workforce growth, frequently in collaboration with firms specializing in outsourced AI projects to maximize operational efficiency.

Late-Stage Maturity (Series D and E)

Only 3% of the funded amount went towards companies raising their Series D, while 4% advanced to Series E, signifying firms at advanced funding stages, often preparing for IPOs or making strategic acquisitions.

These mature companies are generally those that are transforming their business processes to enhance their internal capabilities and build a more robust offering by leveraging novel AI technologies.

The funding amounts in these cases will almost entirely be devoted to integrating machine learning models either by developing a team in-house or by offshoring technical development to countries like India, the Philippines, Ukraine, etc.

Equity Crowdfunding Gains Traction

Equity crowdfunding, representing 12% of AI funding, is increasingly favored by early-stage startups looking for a democratized funding approach to accelerate development at lower costs.

Private Equity Rarity

Just 0.9% of AI companies received private equity, a reflection of the sector's relatively nascent stage, with most AI companies still reliant on venture capital or crowdfunding for growth.

A note from the Founder

Riddhesh Ganatra, Founder and CEO of Code B, highlighted the evolving landscape of AI investment, observing that Series A funding is laying a solid foundation for emerging companies, while later-stage rounds indicate a trajectory toward long-term growth. He explained that Code B's mission is to equip investors with data-driven insights that help them discern authentic AI innovation from overvalued ventures.

Methodology and Rigorous Data Verification

The Code B report combines exclusive data from Crunchbase and Apollo.io and extensive web scraping of company websites, press releases, and LinkedIn pages. This approach ensures that only companies actively engaged in AI are included, removing those using AI-related keywords merely for hype.

About Code B

Code.b.dev specializes in high-quality web and mobile app development, cloud computing solutions, and DevOps consulting with a focus on specialized outsourcing and offshoring expertise. Our team delivers assured digital experiences, optimum cloud infrastructures, and efficient development pipelines designed to drive global growth and innovation.

For more information or to access the full report, please contact:

Riddhesh Ganatra,

Founder at Code B,

riddhesh@code-b.dev

+91 9137595718

Code-b.dev.

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