Gen AI (2024)
The startups behind our new work wingmen
Last updated: 7 Mar 2024
Market 101
Generative AI’s crazy, breakout year has stirred debate about what the tech means for our future. From the hopeful “it will help us all become productive geniuses” perspectives, to the alarmist “these sentient machines will replace us” sentiments — there is no shortage of hot takes.
Today’s tools can help to produce text, audio, video, music, code, images and design in response to prompts — capabilities that can help automate tasks and cut down on grunt work. A banner 2023 for European GenAI saw startups raise $1.5bn — a sharp increase on the $554m disbursed by VCs in 2022 (six $100m+ megarounds propelled this 2023 growth). 2024 is just over two months old and European startups have already pulled in $267m, almost half the sum raised by the sector in 2022.
One of the big early winners of the year is French GenAI startup PhotoRoom, which raised a $43m Series B last month that brings the company's valuation to around $500m. The four-year-old startup, which can remove and replace photo backgrounds in a blink, has found one of the few compelling business use cases for the technology to have emerged so far.
For all the fun things you can do with GenAI — like creating viral fake images, including the Pope in a giant puffer jacket — report after report prophesies how the tech will upend millions of jobs. If such a future is around the corner, career progress will likely depend on an ability to master these tools. Already, there is a generation split in the workforce, with Gen Z being the most common GenAI users — 63% of this cohort use the technology at least once a week, according to an Accenture survey. Goldman Sachs estimates a quarter of work tasks in the US and Europe could be automated by GenAI. At the upper end of its potential, more than 40% of tasks in administration and the legal profession could be automated. This compares with less than one-tenth of tasks in physically intensive professions such as construction and maintenance.
Some companies are touting the imminent arrival of powerful AI creations capable of performing complex tasks from start to finish. London-based startup 11X has developed four so-called digital workers who perform chunky tasks without constant prompts. Anton Osika, founder of Stockholm-based Lovable, tells Sifted that AI programmes like his will be able to build “80% of all SaaS” software by the end of 2025 and, before long, “you will see software unicorns where there is pretty much no human in the loop — it’s quite likely it will be just one person”.
Still, it would be wise to take certain claims with a pinch of salt. When a sector attracts so much hype so soon, what we often see next is a bunch of startups blowing up on the launchpad. Lofty GenAI valuations also summon unpleasant memories of 2021 when VCs were eagerly deploying capital at unreasonable prices. There will also be some pretty big bumps along the way for GenAI. Already, the tech’s drawing concerns around data security, intellectual property rights and its habit of making stuff up. The extra hurdle for European startups is that they are going up against moneybag American tech giants like Google and Microsoft: finding valuable use cases in narrow, specific domains — like PhotoRoom has managed to do — will be their best ticket to success.
Early stage market map
Deals
Key facts
75%
of leaders using AI say the quality of team collaboration has increased1
$1.3tn
is the forecast for GenAI’s market value by 20322
14%
of frontline workers have received GenAI training3
Trends to watch
Say hello to your new AI coworker
Welcome to the 2030 office: there’s fewer humans and more AI copilots. Digital assistants are big with investors right now. Earlier this year, Paris-based Nabla, which provides doctors with an AI-powered tool that generates clinical notes from patient consultations, raised a $24m Series B. Backers include French billionaire Xavier Niel and Sweep CEO Rachel Delacour.
This year also saw Robin AI, which aids companies in drafting and editing contracts, secure £18.1m in a round led by Singaporean sovereign wealth fund Temasek. Danish startup Corti’s tool — which listens to doctor-patient conversations, suggests follow-up questions and provides advice — raised a $60m Series B in 2023.
This AI onslaught doesn’t necessarily spell mass unemployment but rather a reorganisation of work roles and responsibilities. Given the scale of the office workload, it certainly feels like a personal AI assistant is necessary. According to a survey by Morning Consult, 58% of employees spend an hour or more a day on messages and emails — and 64% of leaders say they need more time than they have to finish all their work during the day.
ChatGPT vs Le ChatGPT
While VC funding for European GenAI startups approached $1.5bn in 2023, this amount was overshadowed by the over-$14bn pulled in by US AI counterparts (and $10bn of this injection went into OpenAI alone).
In 2024, European companies are expected to spend nearly $2.8bn on GenAI tools, according to the Infosys Generative AI radar report, less than half of the expected $6bn investment for GenAI tools in the US.
Europe’s big hopes of creating an AI champion rest with France’s most prized AI company, Mistral. But the startup’s recent decision to partner with Microsoft — in a deal that saw the US tech giant take a stake in Mistral — has raised some sceptical eyebrows. It does little to soothe the fear among certain European lawmakers that GenAI power risks being concentrated in the hands of Microsoft and, by extension, the US.
Language is where Europe can thrive
With Microsoft, Google, Amazon and OpenAI asserting their dominance in English large language models (LLMs), European startups have to innovate in other continental languages.
One early mover here is Silo, a Finnish startup that has access to data from an EU-funded initiative called The High-Performance Language Technologies project. Silo intends to leverage the project’s vast repository of seven petabytes (7,000 terabytes) of language data spanning 80 languages (for comparison, OpenAI was trained on 45 terabytes of data) to train its LLM. This initiative could help establish European AI's stronghold against Big Tech when it comes to less common languages.
GenAI unicorns are in a league of their own
The time to reach GenAI billion-dollar status has been extremely short for a few companies — the UK’s Stability AI became a unicorn just three years after launching and Mistral AI got there in six months.
London-based Synthesia can be considered a relative laggard in the GenAI world by comparison, taking six years to become a unicorn.
Startups tracked by Sifted
Sifted take
The AI coworker has already entered the workplace. GenAI will be a work enhancer for white collar workers who will find their duties begin to change over time - from pure execution on tasks to part execution and part verification on work our bot friends lead on. It's going to continue being a feeding frenzy for VCs, who are queuing up to back the latest GenAI talent all over Europe. And while it will be hard for the region to compete with moneybags American tech firms, European founders can find their edge with non-English LLMs.
Rising stars
Backed by a16z and TQ Ventures, Reface is an AI-powered content creation platform with more than 250m downloads worldwide and 7bn synthetic pieces of content created.
Round
Seed
Valuation
Undisclosed
Date
2020
Size
€5m
Allows teams to create and use collaborative AI assistants for a range of tools — including Notion, Slack, Github and Google Drive.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€5m
Cofounded by former Github CTO Jason Warner alongside serial AI entrepreneur Eiso Kant, Poolside is an AI platform for developers.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€92m
Develops photorealistic AI-generated content, including face-swap and audio technology.
Round
Seed
Valuation
Undisclosed
Date
2022
Size
€6.8m
Early stage startups to watch
Aindo
Data practices
€8.9m
€6m
-
Aiva Technologies
Audio editing & generation
€2.4m
€1.5m
-
Aive
Images & video editing
€5.5m
€3m
-
Algomo
Customer support
-
-
-
askEarth
AI research
€800k
€300k
-
Atlas
Vision & 3D visuals
€9.6m
€4.1m
-
Beam
Workflow automation
€1.5m
€1.5m
-
Boltzbit
AI platforms
€1.9m
-
-
Brighter AI
Images & video editing
€8m
-
-
Certainly
Customer support
-
€4m
-
Cogram
Text
-
€450k
-
Colossyan
Content creation
€25.6m
€20m
-
Diffblue
Coding
€56.4m
€7.3m
-
Digital First AI
Text
€1m
€1m
-
Dust
Data practices
€5m
€5m
-
Flower Labs
Education & training
€21.6m
€18.2m
-
Glyphic
Workflow automation
€5m
€5m
-
Humanloop
AI platforms
€2.5m
€2.4m
-
Hypertype
Text
€1.3m
€1.1m
-
INTELLITHING
AI platforms
€351k
€320k
-
Jina AI
AI platforms
€27.3m
€27.3m
-
Kive
Images & video editing
€7.9m
€6.4m
-
Lalaland
Vision & 3D visuals
€5m
€2.1m
-
LangWatch.ai part of Reasoning Engine B.V.
Data practices
€100k
€100k
-
Metaphysic
Content creation
-
€6.8m
-
Mindset AI
Workflow automation
€3.2m
€1.4m
-
Mindtech Global
Education & training
€5.2m
€2.4m
-
Modl.ai
Vision & 3D visuals
€9.2m
€7.6m
-
Moveo.AI
Workflow automation
€2m
€1.6m
-
Mystic AI
Coding
€5m
€3.7m
-
NeuralSpace
Text
€3m
€3m
-
Nuclia
Data practices
€4.9m
€4.9m
-
nyonic
AI platforms
€18.2m
€18.2m
-
Poolside AI
Coding
€114.5m
€90.9m
-
Qatalog
Workflow automation
€16.8m
€13.6m
-
Qdrant
Data practices
€35.2m
€25.7m
-
Quacks.ai
Text
€120k
€120k
€1.2m
Recraft, Inc.
Images & video editing
€15m
€11m
-
Reface
Images & video editing
€5.3m
€5m
-
Reword
AI research
-
-
-
-
Shai
Images & video editing
€100k
€100k
-
SKY ENGINE AI
Data practices
€9m
€6.5m
-
Smoot
Content creation
-
-
-
-
SuperDuperDB
Data practices
€1.8m
€1.8m
-
Syntho
Data practices
€1m
€1m
€5m
Syntonym
Data practices
€1.2m
€820k
-
Text Cortex AI
Text
€1.1m
€1.1m
-
Tiledesk
Customer support
€600k
€600k
-
Turing Intelligence Technology Limited
AI platforms
€4.8m
€3.6m
-
Twain
Text
€1.8m
€1.8m
-
Typetone
Content creation
€500k
€250k
-
UIzard
Data practices
€16.9m
€13.6m
-
VEED.IO
Images & video editing
€31.8m
€31.8m
-
VOISEED SRL
Audio editing & generation
€2.8m
€1m
-
Wondercraft
Audio editing & generation
€2.8m
€2.8m
-
Yepic.ai
Images & video editing
€370k
€370k
€30m
YouMakr
Education & training
€450k
€450k
-
Zibra AI
Vision & 3D visuals
€2.6m
€1.1m
€20m
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
First catching the headlines in June 2023 with Europe’s largest ever seed round, which followed just three weeks after the coming began existing, Mistral AI has since established itself as Europe’s leading large language model developer. It recently secured a €15m convertible note from Microsoft, in an extension to its €385m Series A round from leading European and US-based VCs at a €1.9bn valuation.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Founded by former Apple AI engineering manager Jonas Andrulis, Aleph Alpha raised €580m — including a €340m grant from Dieter Schwarz Foundation and Ipai — to enable companies to deploy their own large language models.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Text-to-speech AI video generator platform that became a unicorn in 2023 following a $90m round led by investors Accel and NVIDIA-owned NVentures.
Sources
News articles
Europe has a secret weapon to beat Big Tech on GenAI | November 2023 | Sifted
From Potential to Profit with GenAI | January 2024 | BCG
Temasek backs GenAI legaltech startup Robin AI in £18m raise | January 2024 | Sifted
What’s the future of generative AI? An early view in 15 charts | August 2023 | McKinsey
Europe to double spending on generative AI in 2024: Infosys Research | December 2023 | Economic Times
2 Generative AI to Become a $1.3 Trillion Market by 2032, Research Finds | June 2023 | Bloomberg
3 Just 14% of Frontline Employees Have Received Training to Address How AI Will Change Their Jobs, but 86% of Employees Say They’ll Need It | June 2023 | BCG
Research reports
The GenAI office | January 2024 | Sifted
1 Work shift - How to create the AI-powered office of the future | February 2024 | Sifted
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