Interest in artificial intelligence in healthcare soared in 2019 with investors pouring $4 billion into the sector across 367 deals, according to a new report.
That's up from nearly $2.7 billion invested in healthcare AI in 2018 across 264 deals, technology market intelligence company CB Insights reported last year.
In general, AI startups raised a record $26.6 billion in 2019 with a total of 2,235 investment deals, according to CB Insights' latest AI global funding report.
Healthcare led AI investment, topping the $2.2 billion raised by financial and insurance AI. Companies working on AI in retail and consumer packaged goods brought in $1.5 billion in 159 deals.
In the third quarter, healthcare AI companies raised almost $1.6 billion across 103 deals, CB Insights reported.
The surge in funding was led by mega-rounds of financing reaching at least $100 million. Babylon Health, a U.K.-based AI chatbot that also links up to provider practices, falls into this category and raised $550 million last year.
Precision medicine company Tempus, which uses AI to analyze health data, scored $200 million in total funding, and drug discovery company Recursion Pharmaceuticals locked in $121 million in a series C funding round.
Freenome, a company using AI for early cancer detection, closed a $160 million series B financing round in July.
Other healthcare AI companies that landed big funding deals in 2019 include PathAI, a startup that uses AI for pathology services and diagnostic tools, which raised $60 million, and BenevolentAI, which raised $90 million in equity funding in September.
Babylon Health also is one of 24 AI startups reaching unicorn status—meaning they are valued at $1 billion or more—in 2019, according to CB Insights.
MobiHealthNews reported in December that Babylon Health plans to launch its triage chatbot service in the U.S. early this year and has lined up strategic partners to roll out the service. One of Babylon's first planned programs will be aimed at Medicaid, according to MobiHealthNews.
Corporations are increasingly partnering with AI startups as incumbents look to startups to help them compete with newer players entering the space.
Microsoft partners with KenSci, which developed an artificial intelligence and machine learning-powered risk prediction platform; NVIDIA collaborates with Paige.AI, which uses AI for cancer pathology; and Google has teamed up with Suki, an AI-powered, voice-enabled digital assistant for doctors.
Digital therapeutics and remote monitoring startup Biofourmis also recently made a deal with pharma giant Novartis to develop new digital therapeutic programs to help patients recently diagnosed with heart failure.
2019 also saw a record number of AI startups making exits, either through mergers and acquisitions or initial public offerings. There were 231 M&A deals and 10 IPOs across all industries. Among healthcare AI startups, there were 17 M&A deals and two IPOs.
Venture capital firms like Plug and Play Ventures, Accel and Lightspeed Ventures are among the venture capital firms with the most deals in 2019, CB Insights reported. Corporate venture capital firms with the most deals include Intel Capital and Google Ventures, followed by SBI Investment in Japan.