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Perplexity, the artificial intelligence-driven search engine, has closed its fourth funding round this year, tripling its valuation to $9 billion as it aims to compete with services from Google and OpenAI.
The $500 million round was led by Institutional Venture Partners, with participation from Nvidia, New Enterprise Associates, B Capital and T Rowe Price, according to people familiar with the deal. Previous investors include SoftBank’s Vision Fund 2, Nvidia and Amazon founder Jeff Bezos, as well as OpenAI co-founder Andrei Karpathy and Meta’s chief AI scientist Yann LeCun. Celebrities in the AI industry are also included.
The San Francisco-based group has grown rapidly this year, with its products receiving hundreds of millions of queries each month. It has 15 million monthly active users, with most of its traffic coming from the United States.
The new funding will help Perplexity compete with West Coast rivals in the increasingly competitive race for engineers. “The talent war for AI has never been fiercer,” said Ali Ghodshi, co-founder and CEO of AI and data analytics company Databricks, which announced a $10 billion funding round on Tuesday. speak
Perplexity seeks to leverage and improve upon the search advertising system pioneered by Google. In this system, marketers bid to place sponsored links in response to search queries. The company is in talks with major brands to pilot advertising on its platform.
In a sign of increasing competition in the field, AI companies have recently targeted the search market by linking chatbots to the internet. This week, OpenAI rolled out web search for its popular ChatGPT product, while Anthropic’s Claude can perform searches through a feature called “Computer Usage.”
Google and Microsoft, leaders in the $300 billion digital advertising industry, also recently enhanced their AI chatbots and built large language models into their search services that make results more conversational.
The latest round increases Perplexity’s valuation ninefold since the beginning of the year, allowing the hot startup developing new AI tools to attract hundreds of millions or even billions of dollars in investment. This is a sign.
After OpenAI raised $6.6 billion in funding in October, one of Silicon Valley’s largest, one person close to the company said Perplexity has been flooded with unsolicited interest from new investors. Ta.
Perplexity, run by former Google intern Aravind Srinivas, raised $250 million this summer on top of previous funding rounds in January and April.
Perplexity makes money through subscriptions. The company said its annual revenue (a projection of full-year revenue based on the most recent month’s sales) increased from $5 million in January to $35 million in August.
But a spate of deals in loss-making AI startups has raised concerns among some investors that the sector’s rising valuations are exhibiting all the hallmarks of a bubble. But even those who argue that most AI valuations are drifting away from reality are willing to bet on companies they believe could be winners.
Perplexity and T. Rowe Price declined to comment. IVP, B Capital, NEA and Nvidia did not respond to requests for comment. The round was first reported by Bloomberg.
