The generative AI space continues to attract massive investor interest and capital, with AI search engine startup Perplexity emerging as one of the hottest companies in the sector. TechCrunch has learned that Perplexity is currently in the midst of raising at least $250 million in a new funding round at a staggering valuation range of $2.5 billion to $3 billion.
This massive fundraise cements Perplexity’s status as a multi-billion dollar unicorn startup, despite being founded just last year in 2022. The raise comes on the heels of two other large venture capital injections that have rapidly accelerated Perplexity’s valuation ascent in 2023. In January, the startup raised nearly $74 million at a $540 million valuation, followed quickly by a $56 million raise in early March that valued Perplexity at $1 billion.
Sources indicate that prominent existing investors like NEA and IVP are keen to participate in this newest, larger fundraising round, drawn by Perplexity’s breakneck growth and promising AI search technology. However, their participation may hinge on Perplexity’s willingness to grant investor access versus diversifying its capitalization table to bring in fresh funds from new backers.
At its core, Perplexity is building a generative AI search engine powered by large language models that provides query results through a chatbot interface, similar to ChatGPT or the AI-enabled Microsoft Bing. However, Perplexity aims to differentiate through incorporating multiple cutting-edge foundation models like GPT-4, Claude, and others from Anthropic, Mistral, Hugging Face, and potentially Meta. This ensemble approach is designed to generate richer, more accurate search results.
Despite only launching in 2022, Perplexity has rapidly amassed an impressive roster of marquee investors spanning 46 names. This includes top venture funds like Sequoia, Bessemer, and Kindred, major tech companies like Nvidia, Databricks, and Jeff Bezos’ Bezos Expeditions, as well as notable individual investors such as Yann LeCun, Susan Wojcicki, Naval Ravikant, Elad Gil and Hugging Face’s Clément Delangue.
With the generative AI space heating up and AI models requiring immense computing power, frequent and large capital raises have become the norm for startups like Perplexity. One investor described the current period as a “zeitgeist moment” that Perplexity is aiming to fully capitalize on through aggressive fundraising to fuel its AI search ambitions and scale its computing infrastructure. The startup has already processed 75 million queries in 2023 and is reportedly on a $20 million annual recurring revenue run rate, highlighting its traction.
