Perplexity AI Secures $500M Funding, Triples Valuation to $9B Amid AI Search Competition

Perplexity has reportedly closed a $500M funding round | TechCrunch

AI-powered search engine Perplexity has reportedly closed a $500 million funding round, valuing the startup at $9 billion. Bloomberg, citing sources familiar, reports that the round was led by Institutional Venture Partners, and that it closed earlier in December. In an email to TechCrunch, a Perplexity spokesperson declined to comment. The mammoth tranche comes as the competition in AI-powered search heats up. OpenAI recently launched ChatGPT Search, its answer to Perplexity. And Google is developing capabilities to rival some of what Perplexity offers, including AI-generated summaries and answers on search results pages. This week, The Information reported that Google is planning to take a more aggressive move, potentially building a chatbot-like "AI mode" directly into Google Search. Perplexity isn't resting on its laurels -- even as it battles a class action lawsuit over alleged copyright infringement. On Wednesday, the company made its first acquisition, snatching up a startup, Carbon, specializing in connecting AI systems to external data sources.

AI Startup Perplexity Closes Funding Round at $9 Billion Value

Perplexity AI Inc., an artificial intelligence startup building a search product to compete with Alphabet Inc.'s Google, has closed a $500 million round of funding that triples the company's valuation to $9 billion, according to a person familiar with the matter. The round was led by Institutional Venture Partners and completed earlier this month, according to the person, who asked not to be identified discussing private information. Perplexity declined to comment. Even by the lofty standards of other top AI startups, Perplexity has seen its valuation soar rapidly this year. In April, Perplexity was valued at $1 billion. That figure rose to $3 billion in June after the startup received an investment from SoftBank Group Corp.'s Vision Fund 2. The new $9 billion valuation includes the amount raised in the latest round. The funding reflects investor enthusiasm for rethinking online search to incorporate generative AI. Perplexity, founded in 2022, has distinguished itself from other AI chatbots by providing more real-time information. But the startup faces growing competition: ChatGPT-maker OpenAI this week began rolling out search features to all users of the chatbot. Microsoft Corp. and Google have also overhauled their search products to include more conversational AI features. Perplexity offers several services in addition to the paid and free versions of its search tool. The startup launched a product that allows organizations to search internal files and introduced new finance-related features, including looking up stock prices and company earnings data. In March, the company said it had more than 15 million active users. The company has also launched a series of revenue-sharing partnerships with major publishers, including Time and Fortune, after it faced accusations of plagiarism from some news outlets. In addition to SoftBank, Perplexity is backed by Amazon.com Inc. founder Jeff Bezos and Nvidia Corp.

A.I. Answer Engine Maker Perplexity Is Valued at $9B After Latest Fundraising

The startup reportedly projects 2025 revenue to double to $127 million. At the beginning of 2024, the San Francisco-based startup Perplexity AI was valued at just over $500 million. Less than a year later, it is now worth a staggering $9 billion, as deep-pocketed investors and competitors like Google (GOOGL) and OpenAI continue to hedge their bets on the promise of A.I.-powered search. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters Perplexity, best known for its A.I. "answer engine," received its newest valuation after closing on a $500 million round led by Institutional Venture Partners, the Financial Times first reported. The round was participated by Nvidia, New Enterprise Associates and B Capital. Perplexity declined requests for comment from Observer. The startup's valuation has tripled since June, when it raised a round from SoftBank (SFTBF)'s Vision Fund 2. Amazon (AMZN)'s Jeff Bezos and OpenAI co-founder Andrej Karpathy are also among Perplexity's backers. As Perplexity's valuation soars, so does its users. Unlike search engines that provide links in response to search queries. Perplexity's answer engine aims at answering users' specific questions by summarizing information on the internet with citations. While the product processed around 2.5 million daily queries at the beginning of 2024, this figure has since risen to 20 million, according to a recent X post from Perplexity co-founder and CEO Aravind Srinivas. The company had around 15 million active users as of March and has reportedly doubled its projected revenue for 2025 to $127 million. Srinivas co-founded Perplexity in 2022 after a year-long stint as a research scientist at OpenAI and a slew of internships at OpenAI, Google DeepMind and Google. Originally from India, he studied electrical engineering at the Indian Institute of Technology, Madras before receiving a Ph.D. in Computer Science at the University of California, Berkeley in 2021. Perplexity's year of growth hasn't been without controversies. The startup has previously gotten into hot water for allegedly surfacing copyrighted material via its search engine without citation. The company subsequently launched a revenue-sharing publisher's program that has already attracted partnerships with publications like Time, Fortune and Der Spiegel. Perplexity is also growing its business via acquisitions. Yesterday (Dec. 18) the company announced plans to acquire the retrieval engine maker Carbon. It will be Perplexity's second acquisition following last year's purchase of Spellwise, which makes an A.I.-powered keyboard application. The purchase will bolster Perplexity's ability to tap into work files drawn from applications like Google Docs, strengthening its position in the market of A.I.-enabled enterprise search. "Rather than making users search through many different web pages, apps and messages to find the answer they're looking for, we see a future where Perplexity does the research for you," the company said in an announcement.

Perplexity's value triples to $9bn in latest funding round for AI search engine

Perplexity, an artificial intelligence-driven search engine, has closed its fourth funding round this year, tripling its valuation to $9bn as it seeks to compete with offerings from Google and OpenAI. The $500mn round was led by Institutional Venture Partners. Previous investors have included SoftBank's Vision Fund 2, Nvidia and Amazon founder Jeff Bezos, as well as several prominent names from the AI industry such as OpenAI co-founder Andrej Karpathy and Meta's chief AI scientist Yann LeCun. The San Francisco-based group has grown rapidly this year, with its product receiving hundreds of millions of queries a month. It has 15mn monthly active users with most of that traffic coming from the US. It is seeking to capitalise and improve on the search advertising system pioneered by Google, in which marketers bid to have a sponsored link placed against search queries. It is in talks with major brands to pilot advertising on its platform. In a sign of growing competition in the space, AI companies have recently targeted the search market by linking up chatbots to the internet. This week, OpenAI rolled out web searching for its popular ChatGPT product, while Anthropic's Claude can perform searches through a feature called "computer use". Google and Microsoft, which are leaders in the $300bn digital advertising world, have also recently incorporated large language models, which power AI chatbots and make results more conversational, into their search offerings. The latest round has pushed Perplexity's valuation higher by nine-fold since the start of the year, in another sign of how hot start-ups developing new AI tools can draw in hundreds of millions or even billions of dollars in investment. After OpenAI's $6.6bn fundraising in October -- one of the largest in Silicon Valley -- one person close to the company said Perplexity was inundated with unsolicited interest from new investors. Run by former Google intern Aravind Srinivas, Perplexity raised $250mn this summer, on top of previous funding rounds in January and April. Perplexity makes money through subscriptions. It says its annualised revenues -- a projection of full-year revenues based on extrapolating the most recent month's sales -- have grown from $5mn in January to $35mn in August. The spate of deals for lossmaking AI start-ups has stoked concern among some investors that rising valuations in the sector show all the hallmarks of a bubble, however. But even those who argue most AI valuations are increasingly detached from reality are willing to stake bets on companies they believe could be winners. The closing of the round was first reported by Bloomberg.

Jeff Bezos-Backed Perplexity Raises $500 Million, Tripling Its Valuation To $9 Billion As Competition With Google And OpenAI Heats Up - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Perplexity AI, backed by Amazon.com Inc. founder Jeff Bezos, secured $500 million in funding led by Institutional Venture Partners, tripling its valuation to $9 billion, reported the Financial Times on Wednesday, citing sources. What Happened: The San Francisco-based startup has seen rapid growth in 2024, processing hundreds of millions of monthly queries from 15 million active users, mostly in the U.S. The company's market share in AI search increased from 2.7% to 5.8% this year, according to FirstPageSage data. Perplexity challenges Alphabet Inc.'s GOOGL GOOG Google and Microsoft Corp.'s MSFT artificial intelligence-powered search offerings, while also taking on OpenAI. While OpenAI's ChatGPT maintains market leadership with a 73.8% share, followed by Google's Gemini at 13.5%, Perplexity's growth trajectory has attracted high-profile investors. OpenAI's website continues to lead the AI platform race, ranking 92nd globally and 139th in U.S. web traffic, according to recent Similarweb data. The company attracted 250.1 million total visits, showcasing its commanding market position. Perplexity.ai, while trailing in overall rankings at 467th globally and 547th in the U.S., demonstrated strong user engagement. The platform recorded 58.69 million total visits, with users spending an average of six minutes per session and viewing nearly four pages per visit. In contrast, Google's Gemini platform struggled to gain traction, ranking 12,612th globally and 31,018th in the U.S. The service recorded just 989,992 total visits, with notably high bounce rates suggesting challenges in user retention. Monthly visit data further highlights the disparity, with OpenAI recording 83.39 million visits compared to Perplexity.ai's 19.56 million and Gemini's 329,997 visits. While OpenAI leads in raw traffic numbers, Perplexity AI did not immediately respond to Benzinga's request for comment. Similarweb data also shows conversations about Perplexity versus ChatGPT surging over the course of the year, largely taking off in August. See Also: OpenAI Takes A Page From Google's 2007 Playbook, Turns Phones Into AI Hotlines With 1-800-CHATGPT Why It Matters: Previous backers of Perplexity include NVIDIA Corp., SoftBank's Vision Fund 2, and notable AI experts like Meta Platforms Inc.'s chief AI scientist Yann LeCun. The funding comes as competition intensifies in the AI search space. OpenAI recently integrated web searching into ChatGPT, while Anthropic's Claude expanded its capabilities with a "computer use" feature. Both Google and Microsoft have incorporated large language models into their search products to provide more conversational results. Perplexity's revenue model relies on subscriptions, with annualized revenues growing from $5 million in January to $35 million in August. The company is now exploring advertising partnerships with major brands, potentially challenging the traditional search advertising system pioneered by Google. Read Next: Apple Reportedly In Talks With Tencent, TikTok-Parent ByteDance To Roll Out AI Features In China Image Via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Report: Perplexity Closed $500 Million Funding Round in Early December | PYMNTS.com

Perplexity AI reportedly closed a $500 million funding round earlier this month. The round tripled the artificial intelligence (AI) startup's valuation to $9 billion, Bloomberg reported Wednesday (Dec. 18), citing an unnamed source. Reached by PYMNTS, Perplexity declined to comment on the report. HSBC Innovation Capital said Monday (Dec. 16) that 42% of U.S. venture capital was invested into AI companies in 2024 -- up from 36% in 2023 and 22% in 2022 -- and that as of 2024, 20 AI companies have each raised $2 billion or more. "Venture capital has always gravitated toward transformative industries, but the level of consolidation we're seeing within one category is unprecedented," HSBC U.S. Innovation Banking Head Dave Sabow said in a Monday press release. BlackRock said Dec. 7 that it expects 2025 to be a big year for infrastructure and cybersecurity, with the AI boom playing a major role in those investments. "It's still very early in the AI adoption cycle," Jay Jacobs, BlackRock's U.S. head of thematic and active ETFs, told CNBC. Perplexity said in November that it launched an AI-powered shopping assistant in the U.S. and plans to expand it to additional markets. The new Buy With Pro is available to Perplexity Pro users and helps shoppers both research and purchase products. In October, Perplexity CEO Aravind Srinivas said that the AI search company is serving over 100 million queries per week and aims to boost that figure to 100 million queries every day. Srinivas also said in October that Perplexity wants to form revenue-sharing partnerships with news publishers. He added that the company could supply publishers with chatbots that would respond to users' queries on the publishers' websites, using their content to provide answers. His comments came two days after Perplexity was sued by two News Corp-owned publishers that allege that the company's AI search engine uses their copyrighted content to answer users' questions and takes traffic that otherwise would have gone to the publishers' sites.

Perplexity AI gets $500M in funding and immediately spends some of it to buy RAG startup Carbon - SiliconANGLE

Perplexity AI gets $500M in funding and immediately spends some of it to buy RAG startup Carbon Perplexity AI Inc., the creator of an artificial intelligence search engine and a competitor to OpenAI, today revealed it had closed on a hefty $500 million funding round that brings its value to a cool $9 billion. The round was announced by Bloomberg, and came shortly after Perplexity confirmed it had closed on its second-ever acquisition, buying a company called Carbon, officially known as JDCT Inc., for an undisclosed price. Institutional Venture Partners is said to have led Perplexity's latest funding round, which closed earlier this month. No other participants were mentioned in Bloomberg's report. The funding makes Perplexity one of the most valuable generative AI startups of all. At the start of the year, the company was valued at just $520 million, but since then it has closed on a string of big-money funding rounds, growing its value to $3 billion by the end of June, before tripling it with the latest round, which had been rumored for some time prior to being confirmed. All told, Perplexity has closed on four separate rounds of funding this year. The latest round is yet another indication that investors show no signs of letting up on their enthusiasm for AI startups. In particular, there's a lot of belief in the potential of generative AI to rethink the way people search for things online. Perplexity, founded in 2022, is different from other chatbots with its focus on providing real-time information. When prompted, it searches the Web for the most up-to-date information, but instead of producing a series of links, it responds to users in a way that's more like ChatGPT. Perplexity may well need the latest funds though, as it faces growing competition from a host of other players in the AI business. This week, OpenAI began rolling out more search features within its iconic chatbot, and both Google LLC and Microsoft Corp. have revamped their search tools, adding more conversational features within them. In addition to its free app, Perplexity sells subscriptions that give users access to more advanced features. For instance, it offers premium subscribers a tool that allows them to search internal files on their own computer, and it also provides enhanced finance-related features, for looking up stock prices and earnings reports. In March, Perplexity said it had more than 15 million active users. The acquisition of Carbon, first announced by TechCrunch, is likely a move to boost those premium features. The startup specializes in retrieval-augmented generation or RAG technology that connects AI systems to external data sources such as Google Docs, Slack, Notion and other business and productivity applications. The tech will enable Perplexity to search through users files and work messages, and those features will become available early next year. The deal also hints at the possibility that Perplexity is looking to cater more to enterprise users, perhaps allowing company employees to search through the masses of unstructured, internal data at their organizations, so they can work more efficiently. "We believe your AI should be personal to you -- at home, work, or on the go -- and data connectivity is a key part of everyone's daily workflows," said Perplexity Chief Executive Aravind Srinivason in a blog post announcing the acquisition. "Carbon will make it easier for Perplexity's answer engine to be informed by diverse sources of information, whether that data resides in internal databases, cloud storage, or document repositories." Carbon had previously raised $1.3 million in a seed funding round that was announced last year, backed by investors including Treble and MKT1, plus several angels. Carbon's four employees will join Perplexity as part of the transaction. Interestingly, enterprise search is another area that has also gotten the attention of OpenAI. After closing on its latest $6.6 billion funding round in October, OpenAI reportedly told its investors that they're not allowed to invest in a company called Glean Technologies Inc., which is widely regarded as the leader in AI-powered enterprise search. It's said that OpenAI, along with Google and other AI giants are all working to build rival enterprise search products to compete with Glean, and it seems that Perplexity may have similar ambitions too.