AI chatbot Character.AI raises $150 mln led by Andreessen Horowitz despite having no revenue
- ByStartupStory | March 24, 2023
According to information from Reuters, Character.AI has secured $150 million in a recent funding round, which was spearheaded by Andreessen Horowitz. The AI chatbot startup’s valuation now stands at $1 billion. Additionally, the company is said to be engaged in discussions with various cloud providers regarding potential strategic investments.
The trend of AI funding growth has been ongoing since ChatGPT from OpenAI gained widespread recognition, as evidenced by a company with no revenue receiving a billion-dollar valuation. This occurred amidst the aftermath of Silicon Valley Bank’s collapse.
According to data from PitchBook, as of today, the amount invested in AI in 2023 has exceeded the total investment made in 2020, which was $1.5 billion.
Character.AI plans to use the funding to enhance its self-constructed models and also grow its current team of 22 individuals.
According to the company, Character.AI has achieved a milestone of 100 million monthly site visits within just six months since its launch. This growth trajectory is comparable to that of ChatGPT, which had set a record for fastest-growing user base by reaching 100 million monthly users within two months.
According to Character.AI, the average daily duration of site usage among message senders is more than two hours.
A new model will be introduced by the company headquartered in Menlo Park, California. This model will have enhanced productivity features that include drafting emails and aiding in test preparation. In addition to the existing use cases like entertainment, roleplay and emotional support, these new capabilities will also be available.
“We started the company because we want to get this technology in the hands of everybody on Earth, A billion people can invent a billion use cases,” said Noam Shazeer, CEO at Character.AI.
While not currently generating any revenue, Character.AI plans to launch a paid subscription “in the not distant future”, while keeping the current free version available, Shazeer said. He didn’t rule out an ad-supported model.
Replika, a company that creates AI chatbots, charges an annual fee of $69.99 to its 250,000 paying subscribers.
Character.AI, which was established in 2021 by Noam Shazeer and Daniel De Freitas, both of whom are ex-Google researchers, had secured investments from various sources, including Nat Friedman, the former CEO of GitHub.
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