Perplexity AI lands $63M funding for generative AI search at $1B valuation

The generative artificial intelligence search engine startup Perplexity AI today announced it raised $62.7 million in new funding that doubles its valuation since its last round to more than $1 billion.

The investment was led by Daniel Gross, former head of AI at Y Combinator, with participation from new investors Stanley Druckenmiller, Y Combinator Chief Executive Garry Tan and Figma Inc. CEO Dylan Field. Existing investors, including Nvidia Corp., Elad Gil, Nat Friedman and Amazon.com Inc. founder Jeff Bezos, also participated in the round.

The funding follows a report from the Wall Street Journal in March that Perplexity was seeking further funding since its last round in January. It brings the company’s total funding to $165 million.

Although the startup brought in funds recently, TechCrunch reported  today that this may not be the last. Multiple sources told the publication that Perplexity is currently close to closing an even larger round of at least $250 million that could catapult the company’s valuation to $2.5 billion to $3 billion.

Perplexity operates differently than a traditional search engine, looking to disrupt the search market created by giants such as Google LLC. Instead of having people enter keywords and having the website provide a list of results, the service provides an AI chatbot that allows users to pose questions in natural language about web searchers and it answers conversationally.

As a result, the answers are much more intuitive and understandable than a bland list, or at least that’s the goal. Responses also include complete, verifiable citations to sources, along with multimedia such as charts, videos and images to provide extra context for searchers. The company says that means users don’t need to pour over confusing lists that could include spam, advertisements, affiliated links and other tricks used to hide actual content. Perplexity’s chatbot works to brings out useful content and summarize it the way another person might.

Alongside the funding, Perplexity announced the launch of Enterprise Pro, the company’s first for business offering aimed at enhanced security and privacy needed within enterprise environments. The new service, priced at $40 a month, includes added features that provide stronger security and data protection such as team member management and deleting queries after seven days.

The company said that Enterprise Pro has been integrated with customers such as Zoom Video Communications Inc.’s product team for targeted search, HP Inc.’s sales teams for research, and health editorial teams at wellbeing and behavior change company Thrive Global to validate updates based on peer-reviewed science.

“Perplexity Enterprise Pro has allowed Databricks to substantially accelerate R&D, making it easier for our engineering, marketing and sales teams to execute faster,” said Databricks Chief Executive Ali Ghodsi. “We estimate it helps our team save 5,000 working hours monthly.”

The company also offers a lower cost Perplexity Pro version, at $20 per month, which unlocks access to Perplexity Copilot. This opens up access to voice-to-text, unlimited file uploads, unlimited search queries, personal preferences and image generation capabilities.

Behind the scenes, Perplexity uses the power of multiple large language models to deliver its results. That includes models developed in-house and external models such as Google’s Gemini, Mistral 7B, Anthropic PBC’s Claude and OpenAI’s GPT-4. Pro subscribers can select their preferred model when making conversational search queries, allowing for a customized search experience.

Perplexity said that with this funding, the plan is to fuel global expansion. The company penned new partnerships with two of the world’s largest telecom firms: Japan’s SoftBank Corp. and Germany’s Deutsche Telekom. Between the two, the company will enlarge its global reach to an audience of over 335 million more potential users across mobile and broadband.

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