Perplexity AI is nearing the completion of a mega funding round that will boost its valuation to $9 billion. The company is set to secure $500 million in this round, led by Institutional Venture Partners. It would position Perplexity as one of the most valuable Generative AI startups globally.
Perplexity AI developed an AI-powered search engine that rivals major players like Google Search and OpenAI’s ChatGPT. Unlike traditional search engines that return a list of links, Perplexity’s engine responds directly to user queries in a conversational style similar to ChatGPT.
As it relates to traction, the mobile app (downloaded over 2 million times) and web app, handles approximately 230 million search queries monthly and reported an ARR of about $50 million. This would translate into a revenue multiple of 180x, while Sierra just raised at a multiple of 225x.
The startup offers its tools for free but generates revenue through premium subscriptions with advanced features and has also introduced an enterprise-grade version for businesses.
The startup is currently defending itself against a lawsuit from the Wall Street Journal and the New York Post, emphasizing that AI-powered tools like theirs provide transformative access to publicly reported facts, which they argue should not be exclusively controlled by corporations. Despite the lawsuit, Perplexity remains open to collaborative partnerships with media companies and has already established revenue-sharing agreements with publishers like TIME, Fortune, and Der Spiegel.
ChatGPT Search recently debuted from AI startup,s OpenAI, with a list of publishers paying for their content to populate in user searches—abject bias to impartial information retrieval.
The funds from this new investment round will be directed towards further development and expansion of Perplexity AI’s platform and capabilities.
