Artificial Intelligence

Perplexity's Ambitious Funding Round: Targeting $250M+ for AI Search Advancement

By Business OutstandersPUBLISHED: April 23, 23:35
Aravind Sreenivas, Founder & CEO, Perplexity Ai

In the market ecstatic with excitement, Perplexity, the AI powered search engine startup, is consistently forefronting again. According to the sources, it is reported that the company is looking into a larger funding round which it seeks to raise at least $250 million. According to forecasts, the deal is likely to fetch over $2.5 bn – $3 bn, reflecting the company's vertiginous growth path.

The pace of growth will accelerate upon recent successes, leveraging on the multi-fold surge in the company's valuation at each investment round. Four months ago, Perplexity raised $74 million in seed funding which was valued at $540 million—a big jump from the $121 million valuation it had then. Not only that, this company introduced an investment round of $1 billion at the beginning of March. Though this raise generally has been a bit unnoticeable, NEA and IVP, the companies that have invested in Perplexity previously, were still willing to contribute to its growth at this stage.

However, only the reported rounds complete the history. According to insiders, Perplexity is on a hunt for “additional funding” to “maximize its market growth opportunity.” The existing ones, who are NEA and IVP also are investigating this larger round. Whether the company intends to work only with the existing backers or they intend to expand their investor base will have an impact on investors' decision making.

"It's indeed a rapid development path," underlined the partner of one of the existing investors, pointing to the fact that they would remain onboard.

On one hand, the core of Perplexity is the sought-after AI-driven search engine that gives results through a chatting-style interface. While competition on a search landscape is fierce, Perplexity sets itself apart from competitors by a commission of different Large Language Models into algorithms which ensures more accurate and detailed answers.

Perplexity has been blessed with a bunch of intertwined tech and venture capital industry giants in its investor list. While Sequoia and Bessemer, strategic investors like Nvidia and Databricks, and distinguished representatives, Jeff Bezos and Yann LeCun, stand out, these stakeholders still play an important role in the success of the company. It is credible for investors to trust the company that provides evidence of $20 million ARR in 2023 and process 75 million queries in the year.

The recurrent cascade of fundraises reminds of the already depicted mirroring trend of the startup businesses, the same as the rolling fundraising technique used by large corporates like Snap Inc. before they proceeded for an IPO. Just the same, surrounded by Ai-powered innovations and advancements, the human-centric Perplexity has a specific focus on effecting positive changes in society. Rather than chasing multipurpose large language models, the company hones in on perfecting one product category: search all blind spots.

Perplexity's most recent fundraising, which has a great meaning for the beginning of the company, not only shows the startup's momentum, but also tells a bigger story for it is a shift toward the focused AI solutions on the enterprise level. Having established itself as a pioneer in this field, the companies now will continue to check the world's eyes on their path in AI development.

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