August 28, 2024

Come together

Hi there,

Companies are getting acquisitive in pursuit of an AI edge.

Overall AI M&A activity spiked in Q2'24 to 119 deals, surpassing even 2021's quarterly levels.

That includes an uptick of genAI-focused acquisitions — like Nvidia's $700M acquisition of Run:AI to accelerate AI workloads (including genAI deployments) and Hugging Face's acquisition of data curation startup Argilla.

To identify the genAI startups that may be scooped up next, we used CB Insights' proprietary signals:

M&A Probability: a company's chance of an M&A exit in the next 2 years based on 70+ data points, such as company financial metrics and investor track record
Mosaic: measuring a company's health

Customers can see the shortlist of 20+ companies here.

A few key takeaways:

Companies in high-momentum genAI sectors like machine learning security (MLSec) are attractive targets. For example, Protect AI recently picked up two early-stage startups in the space as it builds out its AI security solution.
Agents & copilots are a leading category as enterprises look to scale automation efforts.
High costs of development may push startups to look for an exit. Given the steep price tag of training models and bringing on AI talent, startups running out of runway may increasingly look for exit opportunities (see big tech's recent quasi-acquisitions.)

CB Insights customers can learn more here.

World's greatest

We just released this year's Insurtech 50 — our list of the most promising insurtech startups in the world.

40% of this year's winners are early-stage companies addressing key challenges in the insurance industry.

For example, some of these early birds are focused on understanding the risk associated with extreme weather and climate events.

Others are developing AI assistants that can help improve the speed and accuracy of tasks like underwriting and claims processing.

Get the full list of winners — as well as analysis on their funding, headcount, and investors — for free here.

All AIs on a16z

We recently mined Andreessen Horowitz's (a16z's) AI investments to find out what's capturing its attention amid the generative AI rush.

In a nutshell, here is what we found. In 2024,

Multimedia generation and AI-powered agents and copilots are leading AI priorities for a16z.
Early-stage deals have accounted for the majority of a16z's AI bets.
The two largest a16z-backed AI deals have gone to open-source rivals of OpenAI.

Want to dive deeper into these takeaways? Explore how a16z's AI activity breaks down in this investment thesis map.