Technology

The best-funded generative AI startups in Europe have something in common: Big Tech experience

French founder of artificial intelligence startup Mistral AI, Arthur Mensch, attends the Viva Technology show at Parc des Expositions Porte de Versailles in Paris, France, on May 22, 2024.
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Most of the top-funded generative artificial intelligence companies in Europe were founded by entrepreneurs with experience at U.S. technology giants, according to a new report from venture capital firm Accel.

The report, produced in partnership with Dealroom, found a quarter of the 221 generative AI companies across Europe and Israel previously worked at Apple, Amazon, DeepMind, Meta, Google and Microsoft.

That figure rose to more than a third (38%) for the top 40 European and Israeli generative AI companies in terms of venture funding raised, and 60% for the top 10 generative AI companies for funding levels.

Harry Nelis, general partner at Accel, told CNBC tech giants are natural catalysts for new generative AI firms, as those companies “have been leaning forward in AI the most and … have the capabilities when it comes to compute, when it comes to data, when it comes to money.”

“They are really smart in the sense that they have seen how an early lead in this field can lead to a massive competitive advantage,” he said, adding there’s a “golden opportunity” for people with “entrepreneurial mindsets” to make their own genAI ventures.

Europe’s best-funded genAI startups

Company Founding country Founding city Total funding raised
Mistral France Paris $1.1 billion
Aleph Alpha Germany Heidelberg $641 million
Hugging Face France Paris $396 million
Owkin France Paris $335 million
H France Paris $235 million
Synthesia United Kingdom London $157 million
Stability AI United Kingdom London $151 million
PolyAI United Kingdom London $118 million
Source: Accel

In its research, Accel defines generative AI as “an emerging AI frontier that uses models trained on a large data set of content medium … to create something new instead of just analysing existing things.”

Nelis noted many of the largest U.S. tech firms have already made early moves in AI — and Europe is an increasing focus.

Google bought British AI lab DeepMind in 2014, and the firm’s tech is now key to AI products including its Gemini generative AI tools.

Meta, the parent company of Facebook, opened the European arm of Fair, or Facebook AI Research, in Paris in 2015.

Many founders of prominent AI startups developing generative AI tools come from Google, DeepMind and Meta.

Microsoft-backed French startup Mistral, for example, counts Arthur Mensch, a former DeepMind AI scientist, as its CEO. Co-founders Timothee Lacroix and Guillaume Lample both worked at Meta.

And fellow French AI firm H, which is backed by Amazon, was co-founded by former DeepMind researchers Laurent Sifre and Karl Tuyls, and Charles Kantor, a former Stanford University student.

Mistral has raised $1 billion of funding to date, according to Accel, while H, which is only a few months old, has already raised $235 million.

Google is the top producer of new generative AI startups in Europe and Israel, Accel said, with 11.3% of genAI companies having founders with past experience at the tech giant.

DeepMind, which Google owns, is in second place, minting 5% of generative AI firms. Meta is third, producing 4.1%.

Many AI founders are professors, too

Accel noted universities play a major role in the creation of generative AI startups. Many European universities, it said, now serve as so-called “founder factories” that produce new startup founders.

More than a third (38%) of companies have at least one founder who holds or has held a position — such as professor, researcher or lecturer — at an academic institution.

Lourdes Agapito, co-founder of British AI firm Synthesia — which uses generative AI to remove the need for physical equipment in video production — is a professor of 3D Vision at University College London.

She says her time at UCL helped connect her with like-minded AI innovators.

While at UCL, Agapito grew to know Matthias Niessner, a Synthesia co-founder, before going on to form the company with CEO Victor Riparbelli and Chief Operating Officer Steffen Tjerrild.

“Looking back on Synthesia’s founding team, what was special about us is how we complemented each other so well in terms of expertise,” Agapito told CNBC via email.

Agapito said being based in London was another “key ingredient” behind Synthesia’s early success.

British universities are the most popular study destination for generative AI founders, Accel’s research found. The University of Cambridge produces the most generative AI companies, with 7.9% of founders having studied there.

France’s Ecole Polytechnique is the second-highest academic founder factory in Europe, with 7% of generative AI founders having studied there.

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