30 March 2023

AI Startups: 18 Early-Stage Companies to Watch

AI Startups: 18 Early-Stage Companies to Watch Farzana Haque, 30 March 2023 It’s happened: Artificial Intelligence (AI) has gone mainstream. For proof, we only need to look at ChatGPT, which became the fastest-growing app in history earlier this year. It’s already become an essential tool for the world’s leading tech companies, including the likes of … AI Startups: 18 Early-Stage Companies to Watch

Words Farzana Haque

It’s happened: Artificial Intelligence (AI) has gone mainstream. For proof, we only need to look at ChatGPT, which became the fastest-growing app in history earlier this year. It’s already become an essential tool for the world’s leading tech companies, including the likes of Google, Amazon and Microsoft—but it’s not just Big Tech getting in on the action. The UK’s home to a fast-growing population of startups and scaleups, developing their own AI technology.

As ChatGPT continues to create a buzz and a host of global experts have signed an open letter calling for the training of powerful AI systems to be suspended, it’s made us curious about the state of the UK’s AI market. In this article, we take a deeper look at the AI sector in the UK, analysing trends and profiling 18 emerging AI startups that look primed to grow.

What is Artificial Intelligence?

The term ’artificial intelligence’ was first coined by computer scientist John McCarthy in the mid-20th century. AI’s come a long way since then—now, it’s a rapidly growing field that deals with the creation of machines that can perform tasks that typically require human cognition, such as learning, reasoning, recognising patterns, making predictions about the future, and—more recently—holding conversations and making art.

Whilst AI is the broad classification for machines simulating human behaviour and tasks, there are many branches that fall under this category. Of these, machine learning is perhaps the most well-known. Machine learning involves repeated training to achieve a known target where the process is unknown. Deep learning, a subset of machine learning, refers to the creation of ever more complex neural networks in an effort to have them solve more difficult problems with less human direction.

Natural Language Processing (NLP) is another widely-used branch of AI, where computer systems are built to interpret human language—think Amazon’s Alexa or Apple’s Siri. NLP is particularly useful as it is able to quickly process large amounts of data.

The UK AI landscape

AI is a fast-growing sector—the number of companies operating within it has grown year on year for the past decade. Over the last 10 years, we’ve seen the number of AI companies increase by a whopping 688%.

The businesses in this sector are overwhelmingly in the early stages. Of the 1684 active high-growth AI companies in the UK, more than half are at seed-stage. A further third of the companies are at venture or growth stages, and there have been no exits so far. All of this points to huge potential for growth and innovation.

Top early-stage AI startups in the UK

Much like other tech sectors, London is a hotspot, with 57% of AI startups being headquartered here. In fact, 72% of the companies in this article are based in London.

In the past 12 months alone, we’ve tracked 137 high-growth companies operating in the AI sector raising funds for the first time. Here, we’ve profiled 18 of those companies, ranked in order of deal size.

Stability AI was incorporated in 2019 and develops open AI models, serving a broad range of applications including image generation, biotech, 3D content and human preference learning. Its partnership with Amazon Web Services supplies the startup with the necessary infrastructure to generate these AI tools.

Known investors: Coatue Management, Lightspeed Venture Partners, O’Shaughnessy Asset Management

Charm Therapeutics is a 2021 startup that develops medicines through 3D deep learning and other drug discovery methods. It created DragonFold, an algorithm which predicts protein/ligand co-folding to find novel medicines. The startup hopes to accelerate its structure-based drug discovery process—via DragonFold—and in turn, create cancer treatments.

Known investors: F-Prime Capital Partners, Axial VC, Braavos Ventures, General Catalyst Partners, Khosla Ventures, OrbiMed

Founded just over a year ago in February 2022, Super Payments develops AI-based payment processing software for businesses. The startup helps companies to increase their sales by offering free payments and no subscription or hardware fees. It also provides benefits such as cashback to improve customer retention. The company is working towards developing its platform and expanding its reach. With its first equity round closed, the company is now valued at £60.8m.

Known investors: Accel, LocalGlobe, Union Square Ventures

Mosaic TX is a pharmaceutical startup that develops cancer treatments using genomics and AI technology. It targets the weaknesses created in cancer cells as changes in their DNA allow them to grow. Since its inception in 2020, the company has grown quickly receiving £527k from two grants, attending the Accelerate@Babrahm accelerator and raising one equity round.

Known investors: N/A

University of Oxford spinout, Salience Labs develops ultra high-speed multi-chip processor that utilises photonics and electronics technology. Founded in 2020, the company hopes to offer power-efficient exascale computing capabilities to AI processes and apps. The startup has impressively already attended three accelerators and received £1.98m in grant funding from Innovate UK.

Known investors: Cambridge Innovation Capital (CIC), Oxford Science Enterprises, Deeptech Labs, Oxford Investment Consultants, Silicon Catalyst

Send Technology Solutions is an insurtech that develops AI-based software solutions for its commercial insurance clients. The software is designed for businesses to manage and automate insurance processes, including underwriting and pricing capabilities. Founded in 2017, the company has over 70 employees. With this equity investment, it’s hoping to expand across the UK and the US and scale its team further. It is valued at £45.9m.

Known investors: Breega Capital, Northern VCT

Scarlet is a healthtech company that is working to empower next-gen medical software by creating a framework for regulators and software companies. In August 2022, the startup raised its first and only round, taking its post-money valuation up to £15.8m.

Known investors: N/A

Glyphic AI develops software for revenue teams aiming to collate and manage enterprise data. The startup was founded in May 2022 and went on to raise its first round soon after in July. The equity investment of £4.48m takes the company to a valuation of £17.7m.

Known investors: N/A

Founded in March 2021, BioCorteX uses deep technology to create a human-microbiome monitoring platform. The startup’s flagship product is CarbonMirror—this technology uses AI and deep tech to reduce risk in pre-clinical trials. The CarbonMirror technology can be applied to numerous fields beyond medicine, from cosmetics and manufacturing to agriculture.

Known investors: N/A

Optalitix provides predictive analytics and decision optimisation software solutions to help businesses—particularly in the finance and insurance industries— make data-driven decisions and improve their operational efficiency. Since its inception in 2013, the company has attended two accelerator programmes—Fintech Innovation Lab London and Lloyd’s Lab— and featured on the InsurTech Impact 25 2021 list.

Known investors: Calculus Capital

Opendialog.ai is a conversational AI platform that enables businesses to build and deploy chatbots and virtual assistants. Working within the healthcare, retail, banking and insurance industries, the startup’s API allows it to integrate with messaging platforms such as Slack. Founded in February 2022, it raised its first and only equity round soon after in May.

Known investors: N/A

Founded in 2021, Haiper is a software that uses AI to create 3D models from text, which can be used in reconstruction solutions. Following its equity injection of £3.91m in March 2022, the startup is valued at £12.0m.

Known investors: N/A

Solvo.ai is an AI-powered supply chain optimisation platform that uses advanced algorithms to provide businesses with real-time insights and recommendations on how to improve their supply chain operations. Among its solutions are demand forecasting, inventory optimization, and transportation management. It raised funds in November 2022—which took its valuation up to £14.4m—to scale its product to market.

Known investors: Frontline Seed, SpeedInvest

Solvemed Group is a medical devices startup that develops a range of biomarkers—using machine-learning technology—and analysis products for use in neurology care and drug development. Founded in 2019, the startup already has a presence in two locations: Cambridge and Warsaw, with plans to expand to Hong Kong and Palo Alto soon.

Known investors: Atmos Ventures, Apex Ventures, Preface Ventures, Sunfish Partners, Techni Ventures, Tensor Ventures

Avnio is a cloud-based platform for B2B organisations which utilises request for proposal (RFP) automation. Its solutions include robotic process automation (RPA), intelligent document processing (IDP), and process mining, among others, to help businesses automate repetitive tasks. The equity investment is intended to be put towards supporting expansion across the US and the development of its software.

Known investors: Felicis Ventures

Coding Bio is a 2020 pharmaceutical startup that specialises in developing precision therapies for genetic diseases. It uses advanced gene editing and delivery technologies to develop treatments that target the root cause of genetic disorders, with a focus on rare diseases. The company has received an Innovate UK grant worth £399k in June 2022.

Known investors: N/A

Qudo is an AI-powered marketing platform that provides data-driven targeting and analysis of research programmes. It uses NLP and machine learning algorithms to automate customer interactions and provide personalised support. Among the 2020 startups’ solutions are chatbots, voice assistants, and other automated tools that can be customised and integrated into existing customer support systems.

Known investors: N/A

Founded in February 2022, autogenAI develops an AI-based tool that develops and writes bidding proposals. The startup’s NLP solution is able to write content—such as reports or website copy—for multiple teams across an organisation from business development to marketing. Its language models have over 175b parameters to allow customisation in accordance with a company’s tone of voice guidelines.