Perplexity AI Raises $73.6 Million in Funding Round Led by IVP, Backed by Investors Including Nvidia and Jeff Bezos
- ByStartupStory | January 6, 2024
Perplexity AI, a startup based in San Francisco, has secured $73.6 million in its latest funding round, led by venture capital firm IVP. The funding round also saw participation from prominent investors including Nvidia and Amazon founder Jeff Bezos, marking another instance of investors seeking out AI startups that challenge established players.
The round, which valued Perplexity AI at approximately $520 million, was also supported by NEA, NVIDIA, Databricks, and Bessemer Venture Partners. Perplexity AI specializes in search tools that offer users immediate answers to queries along with sources and citations. The platform is powered by a range of large language models (LLMs), including OpenAI and Meta’s open-source model Llama.
Having previously raised $25.6 million in March last year in a round led by NEA, Perplexity AI reported having handled over 500 million queries in 2023, with minimal spending on marketing. The company intends to utilize the newly acquired funds to expand its team and enhance its product offerings. With a current headcount of 38, the startup aims to increase its workforce to around 60 by the end of the year.
In terms of user engagement, Perplexity AI’s website and mobile web experienced a surge in visits, reaching 45 million in December, compared to 2.2 million when the service was launched in December 2022, according to data from Similarweb.
Despite its rapid growth, Perplexity AI remains unprofitable, generating annual revenues in the single-digit million range. The company operates in a highly competitive market dominated by Google, which commands around 90% of the search market share. While Microsoft, the backer of OpenAI, has been integrating AI into its Bing search engine, it has yet to make significant inroads against Google.
Aravind Srinivas, CEO of Perplexity AI, highlighted the startup’s advantage in its focused approach and ability to fine-tune various top-performing AI models, rather than being limited to a single model. He expressed confidence that Perplexity AI would be perceived as the next-generation leader in the search market, positioning itself ahead of legacy players like Google.
The recent funding round underscores growing investor interest in AI startups like Perplexity AI, which are challenging the status quo in the search and information retrieval space. With the backing of influential investors and a clear vision for the future, Perplexity AI aims to carve out its niche in the competitive landscape of online search.
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