Hello friends! Axel from Gilion here.
This week, let’s talk a bit about AI and wider tech investments.
Speaking of investments, I would be at fault to not mention Gilion securing a new €10 million funding round from both new and existing investors. .
Now, let’s jump into the latest news.
Unicorns are hatching again
In Q1, Pitchbook's Unicorn Tracker reported a significant uptick, with 37 new startups reaching billion-dollar valuations, up 48% from Q4 2023. Notably, Generative AI startups led the pack, with over half of the newcomers hailing from Europe and Asia. This marks a notable shift in a historically US-dominated field, with even Uzbekistan joining the unicorn club.
Land of the upside down: AI Investments down, but innovation up
Speaking of AI, The Stanford Institute for Human Centered Artificial intelligence just released their 2024 AI index. The Index, which is one of the most widely watched in the industry, had some surprising insights. While overall AI investments declined for the second consecutive year, investments in Generative AI, like Chat GPT, surged ninefold from 2022. This signals a shift in accessibility rather than waning interest, with strong AI models reducing the need for heavy investments.
2023 saw tangible cost savings and revenue increases across a surprisingly wide array of industries. This accessibility trend is reshaping how we evaluate companies, focusing on their AI offense and defense strategies.
Tech's Ripple Effect: Impact Beyond the Horizon
Apart from the 1500 or so AI startups that recently received funding, there are of course wide ranging implications across the industry. When I assess our potential borrowers in our credit committee I now apply a new analytical edge, basically analyzing how the company plays offense vs defense on AI.
On the offense side, given how easily accessible generative AI is, for companies not to be implementing the lowest hanging fruit in efficiency improvements is a major red flag, and could mean a big risk of them being outcompeted on cost in the long-term.
The defense side is more difficult, but is essentially around understanding if a company’s core offerings are likely to be replaced or enhanced by AI. To date, there’s a fair share of SaaS companies set up to solve fairly simple and isolated problems for their customers. If these problems are easily solved by AI all is of course not lost, but it is crucial that the company can then leverage their relationships and data to either build a superior AI-driven solution or pivot how they leverage generative AI to their benefit.
One last thing before we go.
Gilion launch Benchmarks
Understanding your startup's performance metrics is crucial, but what's even more important is knowing how you stack up against your industry peers. With Benchmarks, you can now gain valuable insights into your company's performance compared to other similar companies and peers on their startup metrics.
Check it out today: https://www.gilion.com/blog/benchmarks
Stay tuned as we continue to explore the ever-evolving landscape of technology and its financial ecosystem. And as always, do let us know if there’s anything you’d like for us to cover.
/Axel
