Perplexity AI, which has seen a large chunk of the venture capital that has generously flowed into the fast-evolving generative AI space, is back to fundraising. The SoftBank backed AI startup has raised another $500Mn in its fourth funding round. The company, which recently launched a new ‘Buy with Pro’ feature for its AI search engine, has seen its valuation triple to $9 billion following its latest funding round, according to a Bloomberg report. Led by Institutional Venture Partners, the round was wrapped up earlier this month.
Before this, the Jeff Bezos and Nvidia Corp. backed startup was valued at $3 billion in June this year after receiving an investment from SoftBank Group Vision Fund 2. The development comes at a time when AI companies are becoming the center of investors’ interest. A few recent examples include Quantum AI startup SandboxAQ, which saw its valuation reach $5.3Bn after a recent $300 million fundraising. At the same time, AI poster child ChatGPT maker OpenAI raised $6.6Bn, bringing its valuation to $157Bn in October.
Perplexity, which has faced accusations of copyright infringement for allegedly plagiarizing content from major news outlets to generate AI responses, is known for developing a chatbot-like search engine interface that integrates conversational AI with real-time web search capabilities. With more than 15 million active users in March, the startup offers a mix of free and premium services. According to The Information, Perplexity anticipates more than doubling its annualized revenue to $127 million by 2025 and growing its revenue five times to $656 million by the end of 2026, annually.
Co-founded by Aravind Srinivas, Andy Konwinski, Denis Yarats and Johnny Ho, Perplexity’s AI search engine provides answers with relevant citations and sources, ensuring users can easily verify the accuracy and authenticity of the information. Amid stiff competition from major players like OpenAI, Microsoft, and Google, the startup has extended its services, adding tools for internal file searches and finance-related features.
Perplexity earns revenue through ads and a premium service priced at $20 per month. With a total of 8.9 million app downloads, Perplexity’s premium subscription uses OpenAI’s GPT-4 and Anthropic’s Claude 3 models to support more complex search queries, PDF analysis, and additional features. With more than 300 million users using AI apps, primarily for chatbot or image editing purposes, if we focus on this year alone, many new AI models made their debuts, including Google’s Gemini 2.0 and Veo 2, OpenAI’s OpenAI o1 and GPT-4 Mini, and Meta’s MovieGen and LLaMA 3.2.