(Bloomberg) -- Funding for artificial intelligence startups has surged more than eightfold since 2012, and entrepreneurs are rushing to capitalize on the cash that’s still sitting on the sidelines.
Money is gravitating toward the area as tech giants such as Alphabet Inc. and Facebook Inc. acquire companies and push advancements. Venture capital firms including Andreessen Horowitz, New Enterprise Associates Inc., and Battery Ventures LP announced Tuesday they have injected $140 million into artificial intelligence startup Databricks Inc., raising the company’s funding to $247 million.
While the sector saw just $559 million in funding in 2012, it surged to almost $5 billion in 2016, according to data compiled by research firm CB Insights. The number of deals has also seen a substantial increase, rising from 150 to 698 in that same time frame. According to Databricks, the firm was able to raise at an increased valuation without special provisions such as liquidation preferences, despite having received funding six months ago.
The new round, which was led by Andreessen, will help Databricks reach new companies to make more effective use AI and big data. International expansion and building industry specific solutions for sectors including health care and financials will be a focus, the San Francisco-based startup said.
“The reason we raised is because there is huge pent up demand in the market for this, and there isn’t a great solution out there right now,” Ali Ghodsi, co-founder and chief executive officer, said in an interview. “We want to hit the gas and bring our product to more customers that are outside of the top few companies actually achieving the full potential of AI.”