Perplexity, an AI search engine startup, is a hot asset right now. TechCrunch has learned that the company is currently valued at $3 billion, up from $2.5 billion, and has raised at least another $250 million.
The news comes on the heels of two other major financings that have seen the company's valuation skyrocket in the past four months. In January, the company raised nearly $74 million at a valuation of $540 million (up from $121 million in April 2023). And in early March, the company closed on $56 million in funding at a $1 billion valuation. The increases have been quietly publicized since then (one was listed in PitchBook's database) and were highlighted by Bloomberg today.
These two rounds are not all that has been reported. Sources close to the company say the company is actually also raising more funding to capitalize on the attention it's getting in the market. NEA and IVP are both previous backers of the company and are among the companies considering investing in this large round, according to people familiar with the matter.
Whether they and other previous backers participate will depend on how willing Perplexity is to work with existing investors and expand its cap table to attract new investors rather than diversity. may depend on the situation, the official said.
“They're growing very fast,” said an existing investor partner. “Yes, I will consider participating.”
The core of Perplexity's product is a generative AI-based search engine that uses a chatbot-style interface to deliver results. It's certainly not the only generative AI company pursuing search opportunities. Basically, a lot of people are using products like his ChatGPT and Microsoft's Bing (powered by OpenAI), and Google is working hard to improve search results with Gemini LLM.
However, Perplexity has built an algorithm that incorporates various LLMs, and the idea is that this will produce a more accurate and richer response.
“Unlike other enterprise tools for knowledge work such as Microsoft Copilot, Perplexity Enterprise Pro is also the only enterprise AI product that offers all the most advanced underlying models on the market in one product.OpenAI GPT-4 , Anthropic Claude Opus, Mistral and many more to come,” said CEO and Co-Founder Aravind Srinivas. I got it. In the early hours of today. “This gives customers and users the option to explore and customize the experience depending on their use case.” If it's Srinivas' work, that “future plan” could include works by Hugging Face and Meta. may also be included. official approval The investor list can be anything.
Considering the company was only founded in 2022, Perplexity's current list of investors is already long, reaching 46 people according to PitchBook data.
In addition to IVP and NEA, other notable VCs include Sequoia, Bessemer, and Kindred. Strategic backers include Nvidia, Databricks, and Bezos Expeditions. And many notable names include Jeff Bezos, Chief AI Scientist at Meta, Yann LeCun, Navy Ravikant, Susan Wojcicki, Elad Gil, Nat Friedman, and Clement Delang of Hugging Face. It is connected. New backer Daniel Gross led the $56 million round from March, with other new backers Stanley Druckenmiller, Y Combinator head Garry Tan, Figma CEO Dylan Mr. Field also participated.
The rapidity of one funding following another is reminiscent of the rolling funding we've seen with other large startups over the years. In the years leading up to its IPO, during a period of rapid growth and significant attention, Snap appeared to be raising money on a regular basis. He seems to be all about AI these days, with companies like OpenAI, Anthropic, and Mistral all raising capital at a rapid pace and valuations soaring along with them.
In the case of Perplexity, the startup stands out in the market for several reasons. Most obviously, it's one of the smaller but ambitious up-and-comers in the race to build generative AI services. Its unique position in the market is that it is not focused on the competition of building multi-purpose large-scale language models. Instead, it's taking a cue from one of the world's largest technology companies today and working on a specific product: search, at least for now.
Perplexity is not the only AI startup targeting enterprises and building on highly focused opportunities. UK-based Synthesia takes a similar approach with its AI video tools, building training and customer support video content specifically targeting the business market.
In Perplexity's case, the startup offers tools at free, enterprise and paid levels, and has processed 75 million queries so far this year, with current ARR of $20 million, according to Bloomberg.
Why are they raising prices again so quickly? Yes, perhaps to capitalize on customer and investor interest in what one investor described as a “zeitgeist moment” for startups. But also because of the way we build all kinds of AI services today.
One person said, “Computing is so expensive that we may need to raise money for that reason alone.”
We have reached out to Srivinivas for comment and will update this post as we learn more.