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