Ones to watch: Meet London’s top five fastest-growing generative AI startups

London's generative AI startups have already won millions of pounds from investors. City A.M. takes you through the top five.(Credit: Papercup)

As generative AI takes its place among the most over-used buzzwords of the year, largely thanks to OpenAI’s ChatGPT, London’s generative AI startups have already won millions of pounds from investors.

In fact, recent figures from data company Dealroom show that the UK has the most generative AI startups in Europe, with 48 compared to Germany’s 29 and France’s 17.

So, in case you missed them, City A.M. has compiled a list of London’s top five generative AI startups.

Papercup

Number five on the list is Papercup, an AI dubbing service that automatically translates videos into multiple languages that sound like the original speaker.

Founded in 2017, it has since raised at least $30.5m (£24.8m) from investors including Entrepreneur First, Sands Capital Ventures and Octopus Ventures.

Last year, founder and chief executive Jesse Shemen said: “Shows like [Netflix’s] ‘Squid Game’ validate the thesis that people will watch content created anywhere, in any language, if it is entertaining and interesting. This is why the sector is so primed for growth.”

Synthesia

Next, in fourth place, is Synthesia, which is similar to Papercup. The AI video platform creates professional videos from a text and can turn them into different languages. It has gathered $66.6m (£54.2m) in funding to date.

Investors such as Seedcamp, Google Ventures and Kleiner Perkins have backed the startup, which was founded in 2017 by a team of AI researchers and entrepreneurs from Cambridge, UCL, Stanford, and the Technical University of Munich.

Based in west London, it counts Amazon, Tiffany & Co. and IHG Hotels & Resorts among its customers.

PolyAI

At number three is PolyAI – a 2017 spinout from Cambridge University’s Machine Intelligence Lab.

The startup has developed a machine learning platform for creating customer service agents that sound far more human. They can also be transformed into different languages.

Amadeus Capital Partners, Passion Capital and Khosla Ventures are just some of the firms that have invested a combined total of around $70m (£57m) in the startup. It is currently used by big names like BP and Whitbread.

Lead Investor at Georgian, Emily Walsh, said: “The experience of talking to a PolyAI voice assistant is so good, it’s just like talking to a human.

“It is a breakthrough in automated customer service to have voice assistants that can be customised to a specific brand. We’re seeing impressive adoption of PolyAI’s solutions as a result, in particular as firms struggle with staffing shortages in customer-facing roles.”

Instadeep

In second place is Instadeep, which makes data-based decisions for businesses that help to optimise operations.

For example, it has worked to automate railway scheduling with Deutsche Bahn, the largest rail operator in Europe. It has also worked with Google Deepmind and also partnered with Nvidia and Intel.

The London-based company, which was set up by its Tunisian founders in 2014, announced last year that it had raised $100m (£81.3m) and closed a Series B round led by Alpha Intelligence Capital together with CDIB Capital International.

In January, German company BioNtech bought the startup for as much as £562m. BioNtech has said it wants to use Instadeep to drive drug discovery and develop new vaccines. It will operate as a UK-based global subsidiary of BioNTech.

Stability AI

At the top, its Stability AI. The firm, which is headquartered in London with operations in San Francisco, was spawned by Oxford graduate Emad Mostaque.

Last year the visual art startup, which takes text inputs and generates images, raised $101m (£82.3m) in a funding round led by Coatue, Lightspeed Venture Partners and O’Shaughnessy Asset Management.

But it has sparked controversy for its open source model.

Getty Images has accused Stable Diffusion, a generative AI model developed by Stability AI, of unlawfully scraping over 12m Getty images to train its models, with some content it produces even showing traces of the Getty watermark.

Getty has asked Delaware’s federal court to order Stability to stop using its pictures and wants what could amount to $1.8 trillion in damages, according to Fortune.

The legal troubles don’t stop there. Stability AI’s co-founder, Cyrus Hodes, is currently suing ex-business partner Mostaque and the company. Hodes alleges fraud for convincing him to sell his 15 per cent stake for just $100 (£81) three months before the company achieved a $1bn (£8.1m) market valuation.

Hodes wants his stake restored, plus punitive damages for the alleged fraud.