You.com Startup Raises $50 Million to Target AI-Assistant Market
- ByStartupStory | June 17, 2024
SuSea Inc, the company behind the innovative AI-infused search engine You.com, is raising $50 million in a Series B funding round, according to a source familiar with the effort. This fresh capital injection aims to bolster its presence in the burgeoning market for AI assistants.
The near-complete funding round would value the four-year-old startup between $700 million and $900 million, as reported by Reuters. This significant valuation reflects the increasing interest in AI-driven technologies despite the competitive landscape.
After the launch of ChatGPT, You.com’s AI-powered search engine saw a surge in interest in early 2023. However, the emergence of AI-integrated search options from tech giants like Microsoft and Alphabet’s Google has intensified competition. Microsoft’s AI chatbot-enhanced Bing and Google’s AI-generated answers for complex queries have drawn some users away from You.com.
Recent data from Similarweb shows that You.com had 11 million visitors in May, marking a year-to-date increase in web traffic. Nonetheless, this figure is still below its peak of 20 million visitors in February 2023. Furthermore, app downloads for You.com have dropped by an estimated 69% in 2024 compared to the same period last year, according to Sensor Tower, a market intelligence firm. Other AI startups are also facing similar challenges.
Amid these developments, You.com has evolved into an AI assistant with a focus on productivity and internet search. Richard Socher, the CEO of SuSea Inc and former chief scientist at Salesforce, shared earlier this year that You.com’s capabilities include crafting prose or computer code and navigating various technologies to provide accurate answers to user queries.
Despite requests for comment on the current fundraising, Socher has not responded.
The market for advanced AI assistants is still in its early stages but is already crowded with major players. Google, Microsoft, OpenAI (the creator of ChatGPT), and Apple are all introducing new agent-like features for their vast user bases.
You.com offers a premium consumer subscription at $15 per month when billed annually, which provides access to leading AI models from across the industry and other productivity tools. In comparison, similar subscriptions from Google, Microsoft, and OpenAI cost around $20 monthly.
The source familiar with You.com’s fundraising mentioned that the company’s sales are on the rise, with annual recurring revenue growing fivefold since January. However, specific dollar figures were not disclosed. The revenue growth stems from both consumer and business-to-business subscription models.
Venture capital firm Georgian is leading the current fundraising round, with additional capital coming from You.com’s previous backers, according to the source.
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