* Investment in artificial intelligence is booming amid the pandemic, as automation becomes more common in industries from manufacturing to healthcare to law.
* The global AI market is predicted to be worth as much as $733 billion by 2027, according to market analysis firm Grand View Research.
* We asked eight of Europe's top VC investors to pick out the 15 AI startups they thought were ones to watch in 2020.
* Click here for more BI Prime stories.
In the face of a global economic slowdown, artificial intelligence remains one of the fastest-growing investment areas.
According to Grand View Research, the global AI market is set to be worth around $733 billion by 2027, impacting everything from healthcare to customer service. A PwC report estimated that AI could contribute a whopping $15.7 trillion to the global economy by 2030.
European venture capital investors who are backing up-and-coming AI startups say they too are being affected by the technology.
"AI is disrupting all industries, including venture capital," Henrik Landgren, analytics operating partner at EQT Ventures, told Business Insider in an interview. "With thousands of startups founded every day and only a handful of European unicorns created each year - in 2019 there were 21 new ones - how can an investor find the most promising startups first?"
"Taking a data-driven approach across the investment process and automating as many tasks as possible, enables a team to spend more time building relationships with founders at the right time. Having human and machine work together is a great way to stay ahead of the competition. Long-term, all VCs will need to be data-driven."
We asked eight European venture capitalists to each name two AI startups to watch – one inside their portfolio and one outside.
Check them out — in no particular order — below:
SEE ALSO: These are the 15 European health startups investors think will blow up during the coronavirus pandemic
Sensing Feeling is developing cameras capable of reading emotions
Cited by: Parminder Basran, managing partner at VGC Partners
In the VGC portfolio? Yes
Total raised: $400,000
What it does: London-based Sensing Feeling says its system could be used to predict behaviour by scanning faces and body language to assess an individual's mood.
The footage is checked in real-time against pre-programmed images for signs of anger, contempt, fear, disgust, happiness, sadness and surprise.
Why it's hot in 2020: "In 2019, we invested in AI startup Sensing Feeling from our early stage fund, a business that builds advanced human behavior and emotion-sensing products for businesses.
"What makes this really exciting to us is the fact that it sits at the intersection of computer vision, machine learning and affective computing. It does not require human interaction – it is a non-intrusive technology that analyses real time data in the background and reveals genuine emotions.
"This can have enormous implications for a number of sectors. For instance, in public surveillance systems, this technology can identify threats as they happen and can step in to save lives."
Benevolent AI is focused on machine-led drug discovery
Cited by: Parminder Basran, managing partner at VGC Partners
In the VGC portfolio? No
Total raised: $292 million
What it does: "Benevolent AI empowers scientists to decipher the vast and complex code underlying human biology and find new ways to treat disease. AI models help predict potential disease targets that may be overlooked by scientists."
Why it's hot in 2020: "Given the current race that humankind is in to discover an effective COVID-19 treatment, businesses like Benevolent AI are going to be particularly interesting in the coming months.
"A PE-backed unicorn that applies AI to drug discovery, Benevolent AI develops relation inference AI models to predict potential disease targets that may be overlooked by scientists, as well as developing models to identify differences in proteins between healthy and diseased cells.
"In February this year, the business set up a specialist scientific team to focus on COVID-19 drug discovery."
Deep Render makes it easier to store high-quality images
Cited by: Marcel van der Heijden, partner at Speedinvest
In the Speedinvest portfolio? Yes
Total raised: $2 million
What it does: A London-based startup spun out of Imperial College, Deep Render applies machine learning to image compression, making photo and video file smaller while maintaining quality.
Why it's hot in 2020: "Deep Render is building a new end-to-end AI-based media compression technology which promises a breakthrough in the economics of high-quality media streaming.
"Already now, a few months after our investment in the company, they have delivered an almost 10x improvement in compression rates at equal quality measures with a near real-time decoding performance."
Plumerai is boosting processing power
Cited by: Marcel van der Heijden, partner at Speedinvest, and Henrik Landgren, analytics operating partner at EQT Ventures
In the Speedinvest or EQT portfolios? No
Total raised: Undisclosed
What it does: Plumerai has built an open-source platform for training "binarized neural networks", which reduce the amount of memory computers need to function, and could improve smart devices' processing power.
Why it's hot in 2020: "Plumerai aren't in our portfolio, but have impressed us greatly from afar," says van der Heijden.
"Plumerai is working on a really cool new type of AI called Binarized Neural Networks, which can make traditional AI far cheaper, faster and less computationally-heavy," Landgren said. "Consequently, you can fit the models on very small pieces of hardware and enable devices such as robots and drones to use deep learning locally, which is an incredibly interesting approach!"
Nextail offers retail outlets sustainable solutions
Cited by: Jordi Viñas, general partner at Nauta Capital
In the Nauta portfolio? Yes
Total raised: $12 million
What it does: "By applying AI and prescriptive analytics, Nextail enables quick, automated decision-making to increase online and offline sales, while reducing stock levels. As a result, retailers develop more sustainable supply chain models and achieve better relationships with customers across channels."
Why it's hot in 2020: "Retail is one of the industries with the highest potential for AI impact, especially in terms of accelerating digital transformation. This has been especially tangible during COVID-19. Nextail is solving one of the biggest headaches in retail, the misalignment of supply and demand. "
Darktrace is using AI to improve cybersecurity
Cited by: Jordi Viñas, general partner at Nauta Capital
In the Nauta portfolio? No
Total raised: $230 million
What it does: "Darktrace, an AI cybersecurity startup using machine-learning algorithms to detect and respond to cyber-threats, is extremely impressive. Its technology is similar to a human immune system, attacking threats to the most critical assets of organizations by learning their 'digital DNA'."
Why it's hot in 2020: "As most industries continue to prioritize digital transformation, the security of their data, as well as that of their customers will only become more imperative, so taking a preemptive approach will be fundamental."
Logistics firm 7bridges is helping businesses future-proof their work
Cited by: Scott Sage, cofounder and partner at Crane Venture Partners
In the Crane portfolio? Yes
Total raised: Undisclosed
What it does: 7bridges is an AI-powered logistics platform that audits, models, and automates customer supply chains and logistics operations for maximum efficiency.
Why it's hot in 2020: "The Amazon-led delivery revolution has dramatically raised expectations for logistics, while unexpected events like the COVID-19 crisis have exposed huge vulnerabilities in outdated supply chain processes.
"7bridges transforms their clients' logistics into agile, automated systems, helping them to future-proof their operations while saving up to 50% in direct costs."
Graphcore is creating processors for the age of AI
Cited by: Scott Sage, cofounder and partner at Crane Venture Partners
In the Crane portfolio? No
Total raised: $200 million
What it does: Graphcore is a semiconductor company that develops chips for AI and machine learning.
Why it's hot in 2020: "Graphcore is a business I've long admired, and their tech is genuinely world-leading. We've already entered a new world of machine intelligence, and CPUs and GPUs are not relevant for the plethora of use cases that Graphcore is able to solve today."
Quantexa
Cited by: Ed Lascelles, partner at Albion VC
In the Albion portfolio? Yes
Total raised: $23.3 million
What it does: Quantexa uses artificial intelligence to help banks and other major institutions to detect fraud. Several of its top executives came from BAE Systems/Detica, a major UK defense contractor.
Why it's hot in 2020: "Quantexa shows how powerful AI can be if you can get access to the right data," Lascelles said. "The team is extraordinary and they are building one of the most exciting businesses in Europe."
ThoughtRiver
Cited by: Ed Lascelles, partner at Albion VC
In the Albion portfolio? No
Total raised: $4 million
What it does: ThoughtRiver provides contract pre-screening services to in-house legal teams and law firms to increase sales.
Why it's hot in 2020: "The legal sector is particularly suited to disruption from AI businesses," Lascelles said. "ThoughtRiver is leading the way in reducing friction in contract negotiations."
Dogtooth creates strawberry-picking robots
Cited by: Zoe Chambers, principal at Octopus Ventures
In the Octopus Ventures portfolio? Yes
Total raised: $75,000
What it does: "Dogtooth is leading the way in agritech robotics capable of harvesting soft fruit.
"Using machine vision and AI, Dogtooth has created intelligent robots that are able to recognize a strawberry and decide whether to pick it, then grade it and place it in a punnet over and over again."
Why it's hot in 2020: "This area of agriculture has been facing a concerning labor shortage for years, but with Dogtooth's delivery of the right kind of robot, the bottleneck is set to be smashed open."
Mojo is combing AI with sperm to boost fertility
Cited by: Will Gibbs, principal at Octopus Ventures
In the Octopus Ventures portfolio? No
Total raised: $2 million
What it does: "Mojo uses AI and robotic technology to classify sperm in a more consistent and accurate way, and uses that information to inform more effective fertility pathways. In other words, it should make having a baby much more accessible to all."
Why it's hot in 2020: "Hundreds of millions of parents experience fertility issues every year, yet the way we profile sperm hasn't changed in 40 years and still relies on the human eye. That's why Mojo is so exciting."
MiQ helps marketers make data-driven decisions
Cited by: Tom Wrenn, partner at private equity firm ECI Partners
In the X portfolio? Yes
Total raised: Undisclosed
What it does: "Some of the most interesting AI businesses are those that use the best capabilities of both humans and machines, combined to deliver the best outcomes. Marketing intelligence company MiQ, which ECI has invested in for three years, is a great example."
Why it's hot in 2020: "MiQ uses a blended 'cyborg' approach with great success. Its machine technology, AiQ, can process trillions of data points in any given week to provide data-driven insights, but the real marketing intelligence comes from applying the more creative, human element on top. This means that MiQ's clients get the best of both worlds and, ultimately, an enhanced result."
Featurespace
Cited by: Tom Wrenn, partner at private equity firm ECI Partners
In the X portfolio? No
Total raised: $108 million
What it does: "Featurespace uses AI and machine learning to prevent genuine transactions from being blocked, but also helps to block new fraud attacks as they occur. For end-users this is ideal – nobody wants fraudulent payments taken from their account, but we also don't want our banks or card providers blocking our genuine purchases!"
Why it's hot in 2020: "Featurespace is one to watch. In the current climate, the number of fraud and other financial crime scams has gone through the roof, and tech needs to keep adapting to the ever-increasing sophistication of these fraudsters, without impacting customer services."
Sonantic creates synthetic voices
Cited by: Ted Persson, partner at EQT Ventures
In the EQT Ventures portfolio? Yes
Total raised: $2.6 million
What it does: Sonantic has created human-quality AI voice technology which can enable text-to-speech performances that can be sculpted, edited, and directed just like humans in real life.
Why it's hot in 2020: "Sonantic's offering has the emotional breadth and idiosyncratic variation of the human voice like breath, pitch, intonation, pacing and intensity," Persson said. "This is a virtual copy of the real thing - it's unlike any other tool in this space we've come across so far. The opportunities for Sonantic's human-sounding voices in industries from gaming, media, advertising and beyond are endless."
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