Perplexity AI Nears $500M Funding Round at $14B Valuation, Challenging Google's Search Dominance

AI Search Startup Perplexity Nears Funding at $14 Billion Value

Perplexity AI Inc., a startup building an artificial intelligence search engine to compete with Google, is in advanced discussions to raise a new round of funding at a $14 billion valuation -- a jump from its most recent value but lower than it was initially targeting. Accel Partners is in talks to lead a $500 million investment in the startup, according to people familiar with the matter, who spoke on condition of anonymity to discuss private deliberations. Bloomberg News previously reported Perplexity was looking to raise as much as $1 billion at a valuation of $18 billion, including the amount raised in the round.

Perplexity nears second fundraising in six months at $14bn valuation

Perplexity, the artificial intelligence search engine, is finalising a funding round that would value the start-up at $14bn, a $5bn jump from the valuation it secured six months ago, as it capitalises on a hot market for AI investments. The $500mn round is being led by venture capital firm Accel, according to two people with knowledge of the deal. It would be Perplexity's fifth funding round in less than 18 months. Perplexity, which aims to break Google's two-decade dominance of the search market, is among a new generation of AI start-ups that have attracted intense interest from investors. The San Francisco company closed its previous round in December at a $9bn valuation. It originally sought new funding at a $18bn valuation, according to multiple people familiar with the raise, but one investor said backers were not prepared to double Perplexity's price. Previous investors include Nvidia, New Enterprise Associates, IVP and SoftBank's Vision Fund 2. A number of Big Tech heavyweights have also backed the company, including Amazon founder Jeff Bezos, OpenAI co-founder Andrej Karpathy, Google AI executive Jeff Dean and Meta's Yann LeCun. Perplexity offers an AI search chatbot that aims to rival offerings from Google and OpenAI. Chief executive Aravind Srinivas told the Financial Times last month that Perplexity would need more cash to fund its future products and build its user base. "We are serving like 30mn users right now, but if you want to be a product that gets to 100mn or 500mn, the kind of scale you need to be considered Big Tech, that does need more capital," he said. The company recently launched a voice mode, which allows users to instruct the AI search through voice commands on Apple devices, such as sending emails and finding videos on YouTube. Perplexity plans to match rivals OpenAI and Anthropic in offering an "agentic browser", called Comet. These tools autonomously open a web browser and search online much like a human would in response to user commands. One person close to the company said a main reason for the latest fundraising was to fund development of the browser, which would aim to be a Google Chrome replacement. The new funding was first reported by The Wall Street Journal. Perplexity makes the majority of its revenue through premium subscriptions. It says its annualised revenues -- a projection of full-year revenues based on extrapolating the most recent month's sales -- grew last year from $5mn in January to $35mn in August. Perplexity and Accel declined to comment. Last month, Srinivas said that "inference [the computing power needed to process user requests] and infrastructure eats the majority of the costs" and that the company had good cash reserves. "It is not very common for companies to have this much capital, valuation and revenue, but so few people." Perplexity employs about 200 staff. "It is going to be expensive to do the browser and these agents," he added.

AI firm Perplexity eyes $14 billion in valuation in fresh funding round, WSJ reports

May 12 (Reuters) - Perplexity AI is in advanced talks to raise $500 million in a funding round that would value the startup at $14 billion, the Wall Street Journal reported on Monday, citing people familiar with the matter. Venture capital firm Accel is set to lead the round, the report said. Perplexity did not immediately respond to a Reuters request for comment. The Nvidia-backed (NVDA.O), opens new tab startup provides artificial intelligence search tools that deliver information summaries to users, similar to OpenAI's ChatGPT and Google's (GOOGL.O), opens new tab Gemini. The rapid evolution of AI chatbots in the past year has driven investor enthusiasm in startups and their offerings, which promise to deliver faster and more detailed responses to user queries. Reuters had reported in March that Perplexity was in talks to raise between $500 million and $1 billion at an $18 billion valuation. The company raised funds at a $9 billion valuation last year. Apple also reportedly plans to add AI search providers such as Perplexity as search options within its Safari browser - a move which could put the startup's offerings on display for a large cohort of users. Reporting by Zaheer Kachwala in Bengaluru; Editing by Shinjini Ganguli Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Technology

Perplexity wrapping talks to raise $500 million at $14 billion valuation

Perplexity AI is in late-stage talks to raise $500 million at a $14 billion valuation, a source familiar with the situation confirmed to CNBC. Accel, the Palo Alto-based venture capital firm, will lead the round, according to the source, who spoke anonymously because the round is not yet finalized. The Wall Street Journal first reported on the late-stage numbers. The funding is on the lower end of Perplexity's planned raise, which CNBC reported in March. During those early-stage talks, Perplexity was looking to raise between $500 million and $1 billion in funding at an $18 billion post-money valuation, per a source familiar. The artificial intelligence search engine company competes against the likes of Google and Microsoft-backed OpenAI. Its valuation in December was $9 billion, triple its $3 billion valuation in June 2024. Perplexity has just under $100 million in annual recurring revenue, or ARR, the source told CNBC in March. Perplexity has been in the middle of the generative AI boom that began in late 2022 with the launch of OpenAI's ChatGPT, and it's betting big on its upcoming AI agent web browser, called Comet. But Perplexity faces increasing competition in the AI search market. In March, Anthropic launched its web search product, allowing its chatbot Claude to display real-time search results to a subset of users. Last fall, OpenAI launched a search feature within ChatGPT, its viral chatbot, that positioned it to better compete with Perplexity, as well as leading search engines such as Google and Microsoft's Bing. Google has released AI Overviews within its search product as well, though it sparked controversy over high-profile errors soon after its release.

Perplexity reportedly near $500M funding round at $14B valuation - SiliconANGLE

Search engine startup Perplexity AI Inc. is reportedly in late-stage talks to raise $500 million from investors at a $14 billion valuation. The Wall Street Journal and CNBC broke the news today, citing sources familiar with the matter. Accel is believed to be leading the investment. The fundraising push follows a year in which Perplexity closed four funding rounds cumulatively worth more than $900 million. The company's most recent raise in December valued it at $9 billion. The new round that Perplexity is reportedly negotiating is expected to boost that number by more than 50%, but Perplexity had originally sought an even bigger increase. In March, CNBC reported that the company had planned to raise up to $1 billion at a $18 billion valuation. Perplexity's flagship offering is a search engine that uses large language models to answer user queries. Rather than displaying a list of web links, the service answers questions directly in a natural language format. The company had more than 15 million monthly users as of last April. Perplexity generates revenue through two two paid versions of the service. One plan is geared towards individuals while the other, Enterprise Pro, is designed for organizations. The latter edition allows workers to ask questions about their company's internal records and business datasets from third-party providers. In January, Perplexity moved into the developer tooling market with the launch of a service called Sonar. It's an application programming interface that companies can use to integrate AI-powered search features into their software. Sonar is powered by an eponymous family of custom large language models. In the four months since the service's debut, Perplexity has introduced several more Sonar-branded services for developers. One, Sonar Reasoning, uses DeepSeek-R1 to answer complicated queries such as coding advice requests. There's also a research-optimized API that can run searches across hundreds of data sources to create detailed reports about a topic specified by the user. The new funding round that Perplexity is reportedly raising could help it further expand its developer tooling portfolio. OpenAI, which has raised tens of billions of dollars more, offers APIs with similar features as Sonar. One way Perplexity could differentiate its offerings using the new funding is by replacing the DeepSeek-R1 implementation in Sonar Reasoning with a custom model. Perplexity's consumer business would likely also benefit from the capital injection. In February, the company announced plans to launch an AI-powered browser called Comet. The application will reportedly feature "agentic search" features, which suggests that it's set to provide integrations with Perplexity's search engine or Sonar. CNBC reported today that the company is generating just under $100 million in annual recurring revenue.

Perplexity's valuation soars to $14B with new $500M AI funding

Perplexity, a San Francisco-based artificial intelligence search engine, is nearing completion of a $500mn funding round that would value the start-up at $14bn, a significant increase from its $9bn valuation six months ago, according to Finanical Times. The funding round is being led by venture capital firm Accel, according to two people with knowledge of the deal. This would be Perplexity's fifth funding round in less than 18 months, underscoring the intense interest investors have in AI start-ups. Perplexity's AI search chatbot aims to rival offerings from Google and OpenAI. The company's chief executive, Aravind Srinivas, recently highlighted the need for additional capital to fund future products and expand its user base, which currently stands at around 30mn users. The company has been backed by several high-profile investors, including Nvidia, New Enterprise Associates, IVP, and SoftBank's Vision Fund 2, as well as Big Tech heavyweights such as Amazon founder Jeff Bezos, OpenAI co-founder Andrej Karpathy, Google AI executive Jeff Dean, and Meta's Yann LeCun. Top 5 AI research assistants that compete with ChatGPT Perplexity has been expanding its offerings, recently launching a voice mode that allows users to interact with the AI search through voice commands on Apple devices. The company also plans to launch an "agentic browser" called Comet, which autonomously searches online in response to user commands. The latest fundraising is expected to support the development of this browser, potentially a Google Chrome replacement. Perplexity generates most of its revenue through premium subscriptions, with annualized revenues growing from $5mn in January to $35mn in August last year. Srinivas has noted that the company's computing power and infrastructure costs are significant, but it has substantial cash reserves. Perplexity currently employs around 200 staff and is looking to scale its operations further.

AI firm Perplexity eyes $14 billion in valuation in fresh funding round: Report

Perplexity AI is in advanced talks to raise $500 million in a funding round that would value the startup at $14 billion, the Wall Street Journal reported on Monday, citing people familiar with the matter. Venture capital firm Accel is set to lead the round, the report said. Perplexity did not immediately respond to a Reuters request for comment. The Nvidia-backed startup provides artificial intelligence search tools that deliver information summaries to users, similar to OpenAI's ChatGPT and Google's Gemini. The rapid evolution of AI chatbots in the past year has driven investor enthusiasm in startups and their offerings, which promise to deliver faster and more detailed responses to user queries. Reuters had reported in March that Perplexity was in talks to raise between $500 million and $1 billion at an $18 billion valuation. The company raised funds at a $9 billion valuation last year. Apple also reportedly plans to add AI search providers such as Perplexity as search options within its Safari browser - a move which could put the startup's offerings on display for a large cohort of users.

Perplexity's $14 Billion Valuation Ignites Google Search Engine Shakeup - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Artificial intelligence has captured the imagination of virtually every company in the tech world as the technology rapidly becomes more powerful. Perplexity, an AI startup and a potential threat to Alphabet Inc's GOOG GOOGL Google, was valued at $14 billion in its latest funding round. What Happened: The company is in advanced talks with venture-capital firm Accel for a $500 million funding round that places the San Francisco-based company among the most valuable AI startups, according to The Wall Street Journal. The company was valued at $9 billion in November 2024, representing an over 50% increase in valuation in the past six months. However, the $14 billion figure falls under the start-up's desired $18 billion valuation in March, according to CNBC's Hayden Field. Jeff Bezos and Japan's SoftBank Group are among Perplexity's past investors, according to Reuters. Why it Matters: Perplexity is a search engine that delivers answers to any question by searching the web and compiling information from multiple sources. Unlike traditional search engines, it provides inline citations, allowing users to verify facts easily. Despite some enthusiasm, Perplexity faces many hurdles, including high infrastructure costs and concerns over the legality of its content. Several reports have likened Perplexity to a rival of Google as the latter experiences stagnant search query growth. While the Mountain View, California-based company still maintains a dominant industry position with its search business, its market share sits at its lowest in decades. OpenAI was valued at $300 billion in an April funding round. Elon Musk's xAI, another tech industry newcomer, was valued at $80 billion in March. Also Read: Magnificent Seven Gain $700B After US-China Slash Tariffs, Gold Crashes: What's Driving Markets Monday? Image created using artificial intelligence via Midjourney. GOOGAlphabet Inc$159.773.49%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum33.41Growth66.52Quality87.61Value53.11Price TrendShortMediumLongOverviewGOOGLAlphabet Inc$158.493.76%Market News and Data brought to you by Benzinga APIs

Report: Perplexity AI Discussing Funding Round That Would Push Valuation to $14 Billion | PYMNTS.com

The potential leap in value comes at a time when Apple is considering adding the startup's artificial intelligence (AI) search features to Apple's browser, Safari, and when the Perplexity AI is planning to launch its own web browser called Comet, The Wall Street Journal (WSJ) reported Monday (May 12), citing unnamed sources. Perplexity AI did not immediately reply to PYMNTS' request for comment. The company's AI-powered search tool provides answers in the form of sentences with links to the websites from which it got the information, rather than delivering a list of links like other search engines, according to the WSJ report. While Perplexity AI is growing rapidly, it also faces increasing competition, the report said, pointing to OpenAI's addition of a search engine to ChatGPT last year and Google's introduction of AI Overviews in May 2024. It was reported in December that Perplexity started 2024 with a valuation of $520 million, was valued at $3 billion during the summer, and then tripled its valuation to $9 billion in a funding round in early December. Bloomberg reported in March that Perplexity AI was in early talks to raise $500 million to $1 billion in a funding round that would value it at $18 billion. It was reported Saturday (May 10) that the growing popularity of AI search has made investors in Apple and Google uneasy. Apple Senior Vice President of Services Eddy Cue said last week that searches originating from Google's search engine in Apple's Safari browser fell for the first time in April and that the decreased searches were due to the increasing popularity of AI-based search offerings. Cue also said Apple is considering adding AI search engines like Perplexity to Safari. Perplexity AI said April 24 that its answer engine and assistant will be preinstalled on the new generation of Motorola smartphones worldwide. The company announced its plans to launch Comet in February, saying the web browser is "coming soon" and inviting people to sign up on a waitlist.