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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). In early March, the company closed on funding at a valuation of $1 billion and installed CEO Aravind Srinivas. Revealed on Twitter Today's fundraising total was approximately $63 million.
These two rounds are not all that has been reported. Sources close to the company say Perplexity is raising at least another $250 million in funding to capitalize on the market attention. 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 rather than diversify and expand its cap table to bring in new investors. 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, that's how many people are using products like his ChatGPT and Microsoft's Bing (powered by OpenAI), and Google is using Gemini LLM to significantly improve its search results. .
However, Perplexity has built an algorithm that incorporates various LLMs, and the idea is that this will produce a more accurate and richer response.
We are now also using these to build what we call more advanced enterprise “pro” products.
“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 a tweet promoting the new service earlier 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 people participated, including Jeff Bezos, Meta's Chief AI Scientist Yann LeCun, Navy Ravikant, Susan Wojcicki, Elad Gil, Nat Friedman, and Hugging Face's Clement Delang. There is. 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 high profile, Snap appeared to be raising money on a regular basis. It seems like it's all about AI these days, with companies like OpenAI, Anthropic, and Mistral all raising capital at a rapid pace, and their valuations soaring along with it.
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 do not have We focused on the competition to build multipurpose large-scale language models. Instead, his reference to one of the largest technology companies in the world today, at least for now, is working on his one specific product: search.
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, which offers tools at free, enterprise and paid tiers, has processed 75 million queries so far this year and has a 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.
“C“Amputations are very expensive, so we may need to increase the price just for that reason,” one person said.
We have reached out to Mr. Srinivas for comment and will update this post as we learn more.