Perplexity AI Inc., a rising AI search engine startup challenging Google, is reportedly in early talks to raise funding at a staggering $18 billion valuation, according to a source familiar with the discussions.
The company is considering raising between $500 million to $1 billion in this funding round, although details remain fluid as talks are still in the preliminary stage. Previously, reports suggested that Perplexity had received funding offers at a $15 billion valuation, but the company has declined to comment on these developments.
Perplexity’s Rapid Rise in AI Search:
Founded in 2022, it has quickly gained prominence for leveraging generative AI to revolutionize internet search services. The company’s valuation skyrocketed from $1 billion to $3 billion within a few months last year, reflecting intense investor enthusiasm for AI ventures. If this new funding round is successful, Perplexity’s valuation will have grown 18x in just over two years.
Expanding Services and Growing Revenue:
Perplexity offers both free and paid versions of its AI-powered search engine and has expanded its offerings to include:
Enterprise Search Tools: Allowing organizations to search internal files efficiently.
Finance Features: Tools to track stock prices and access company earnings data.
The company’s annual recurring revenue (ARR) is nearing $100 million, with over 15 million active users as of March.
Intense Competition with Tech Giants:
Despite its rapid growth, Perplexity faces increasing competition from tech giants like Google and OpenAI. OpenAI recently expanded its search capabilities by integrating search functionalities with its ChatGPT platform, adding pressure to Perplexity’s core business.
Backed by Big Names in Tech:
It is backed by major investors, including SoftBank Group Corp, Nvidia Corp., and Amazon founder Jeff Bezos. However, it’s unclear which investors are involved in the ongoing discussions for this new round of funding.
With intense investor interest and fierce competition in the AI space, Perplexity’s next funding round could reshape the landscape of AI-powered search.
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