Perplexity AI's latest big funding event could soon be superseded by another, even bigger chunk of funding, TechCrunch reports. Indeed, his $62.7 million, which the startup raised at a valuation of just over $1 billion, could quickly be trampled by a raise of up to $250 million at a valuation of ~2.5-3x.
what happened? The company's revenue has reportedly grown rapidly, reaching approximately $20 million in annual recurring revenue. Granted, the $1 billion figure is a 50x revenue multiple, but if the company is growing at a fast enough pace, an investor paying up to 150x current ARR would be willing to pay even at a similar price back then. Even if they did, it might not be as crazy as it seems on paper. The 2021 era was often a struggle.
The hype surrounding Perplexity is a big deal, as it indicates that some startups are doing well enough to attract large venture investments. good. A concern I've had for a while is that the AI boom will end up enriching incumbents and not nurturing enough startups to create a new class of tech giants. In my opinion, having a permanent class of technology gods is not the best way to drive long-term innovation. And I think search in general is a good illustration of what happens when technology giants fail to meaningfully compete with each other.
So this week's news about Amazon and Microsoft and Meta and Adobe in the AI space felt like a reminder that Big Tech is trying to eat the AI moment. The confusion that downplays Star Wars may be one of our main hopes for Microsoft or Alphabet to avoid only adding another 3 trillion yen to their market capitalization. Hit play and let's chat!