In 2018, the German startup scene welcomed 218 new companies in the field of artificial intelligence according to a report by the consulting firm Roland Berger. A total of 273 million US dollars were invested. That value doubled in 2019: Roland Berger estimates that the AI startups were able to bring in 510 million dollars last year.
When it comes to artificial intelligence (AI) in Germany, however, there is plenty of room for improvement compared to other European countries. Germany only took fourth place for investments made across Europe. The top spot was taken by France with 1.3 billion dollars followed by the UK in second place with 1.2 billion and Israel in third place with 903 million.
Twice as many AI startups in the UK
When looking at the number of new startups in 2018 (Roland Berger doesn’t quote any figures for 2019), the UK took a significant lead with 590 new AI startups ahead of France with 235. Germany followed closely with 218 startups. Israel took fourth place with 189 new companies in AI. Jochen Ditsche, Partner at Roland Berger, said:
“Many of these developments are very positive because they show that the European AI ecosystem is still growing strongly. However, in comparison to China and the US, the European AI ecosystem is too highly fragmented and suffers from a lack of integration.”
His colleague Ashok Kaul warned:
“Europe needs to stop getting hung up on the small stuff. We need a strategy that ensures free data flow and synergies between countries to balance out the different strengths and weaknesses in patents, infrastructure, investment capacity and skilled professionals.”
Domestic investors play the leading role
A good 80% of the investments from 2009 to 2019 were made by France, the UK, Israel and Germany. In all three countries, domestic investors played the leading role: 73.2% of the investments in France were domestic as were 65.6% in the UK. With 63.55% coming from domestic capital, Germany has proven to be the most open to foreign investors. Those investments were made by the US (14.04%) and the UK (5.42%). For the French (0.99%) and Chinese (1.72%), investing in German AI startups does not seem to be of great interest for the time being.
American investors are most strongly represented in France (7.47%) and the UK (17.53%) as well, while Chinese investors hardly play a role at all in the two countries (France 0.52%, UK 0.49%).
The majority of patents come from the US
The report also took a look at patent applications in the field of AI. With 16,497, the majority of the patents from 2015 to 2019 were registered in the US. Europe (2,595 patents) and China (2,517 patents) lagged far behind.
Within Europe, the British were the most industrious patent applicants and registered for 623 patents during the period examined. Germany took second place in the ranking with 530 patents followed by France (263) and Ireland (228). Israel was not included in this statistic.
About the report
The international report “The road to AI – Investment dynamics in the European ecosystem” was published by Roland Berger in collaboration with France Digitale. According to the association, they cover more than 1,400 digital startups and more than 100 investors. For the report, data was analyzed from the 28 member states of the European Union (including the UK) as well as Norway, Switzerland and Israel. Studies conducted by third parties were also examined.