AI Agents | YC F24 Startups
Which AI agent developer will be in demand in the next few months?
Hi!
What do you think is the most significant trend in AI? Lately, I've been considering AI agents as the main game changer. Tech companies and investors are already betting on this niche. Just so you understand the scale, AI agent startups raised over $8.2B in the last 12 months. And, it's expected that more will follow.
So, let's break down this topic. In this edition, we’ll cover these questions:
Why Are AI Agents In Such High Demand?
Who Are the Main Beneficiaries of this Niche?
What Projects Should We Be Following Right Now?
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AI Agent Opportunities
The first (and easiest) thing we must do is define AI agents. There are quite a few options here, but I prefer this one: AI agents are autonomous programs that can perform tasks without constant (or partial) human intervention. They can be represented as writers, lawyers, consultants, and other specialists in digital professions.
While Elon Musk and his colleagues are preparing the ground for introducing autonomous robots into our homes and offices, we have a great opportunity to lose AI in the online space. And it's pretty funny, because until a few years ago, we thought the automation would start with the real world.
You don't have to go far for examples. Salesforce has already started shipping its Agentforce, and Swedish Klarna is using AI to replace 700 employees. The above (and many others) plan to expand their AI agent deployment capabilities as LLMs evolve.
Why are they doing this? There are many reasons.
Here are the main ones:
Autonomy: AI agents act independently, making decisions and acting on them without direct human control. Less human error is less human error.
Purposefulness: Humans set common goals, and AI agents determine the best course of action to achieve those goals. AI also adapts more quickly to changing circumstances.
Perception & learning: Even a good expert is too slow to learn and has limited ability to master new skills. New models progress much faster.
Cost-effectiveness: The cost of implementing AI agents is fully offset by the fact that they don't need salaries, weekends, and vacations.
Inflation will also affect the employer only at the level of contributions from the company that maintains and optimizes the AI agent.
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Winners In The Race for AI Agents
The question of who will benefit from the mass adoption of AI agents can be looked at from different angles. It could be consumers who will receive a higher level of service, businesses that will become more cost-effective, or companies that will monetize the new generation of bots. To avoid wasting time, let's focus on those already making money in this niche.
And strangely enough, big tech companies don't seem to be a good fit so far. Google, Microsoft, Salesforce and many others are indeed already delivering such solutions. However, it's still too early for direct cash flow. Unless OpenAI, which recently raised a record $6.6B funding round can be considered the leading beneficiary.
We've covered that topic here:
Still, the big winners in this race so far are small to mid-sized startups. According to PitchBook, more than 156 deals worth $8.2B have been closed in the AI agent space in the past 12 months. The median deal value grew 46.9% to roughly $3M.
So yes, startups in this niche are feeling just great. To be specific, analysts name the following sectors in which AI agents will be most in demand:
Software Development
Marketing
Legal Services
Education
Customer service
Startups in these areas (e.g., coder support platform Cognition and legal AI developer Harvey) have already received a significant amount of investment and are expected to continue to attract new rounds.
But what kind of AI startups will join the list of in-demand developers with huge investors?
AI Agents Developers in YC F24
To answer this question, we looked at new participants in Y Combinator (which regularly supports AI startups) and found several suitable projects in the latest batch. What is interesting is that among them were not only developers of the agents themselves but also those who create the basis for providers of such solutions.
Let's break them down.
We have previously analyzed one of the YC cohorts:
Should we make this a regular feature?
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