Perplexity AI reportedly raised $500M at a $9B valuation
Perplexity AI has secured a $500 million funding round led by IVP that values the AI search company at $9 billion post-money. The current round is the latest of four funding efforts Perplexity AI undertook throughout 2024.
Over the last few weeks, it has become increasingly evident that AI-powered search is here to stay, likely to the detriment of publishers and outlets that depend on clicks and digital advertisement to survive. Unquestionably, Perplexity AI is one of the earliest success stories in this space, and its AI-powered search engine has put pressure on OpenAI and Google, two of the biggest names in generative AI, to develop their own AI-powered search products.
In addition to facing toughening competition, Perplexity AI has experienced impressive growth this year. In addition to announcing the acquisition of Carbon, a startup specializing in retrieval augmented generation, Perplexity AI is closing a wildly successful (and controversial) year with a fourth funding round, led by existing investor Institutional Venture Partners (IVP). The $500 million round was reportedly completed earlier this month and values Perplexity AI at $9 billion post-money; a far cry from the $446.4 million pre-money valuation Perplexity received before closing the first part of its Series B round in January, in which the startup raised $73.6 million from IVP and other investors.
By April, Perplexity had negotiated a $62.7 million Series B extension led by Daniel Gross (former head of AI at Y Combinator). The round placed Perplexity's value at $1 billion (post-money). Then, in June, reports emerged that the startup was closing yet another funding round, this time looking for $250 million at a $3 billion valuation. IVP, New Enterprise Associates (NEA), and SoftBank were among the backers in this round.
Throughout 2024, in addition to raising massive amounts of funding, the startup delivered a wide selection of products, including an ambitious attempt at taking on e-commerce with an innovative AI-powered shopping experience. Perplexity may be closing the year on a high note, but it must be mentioned that its competitors have been relentlessly working to catch up with the startup. In the last few weeks, OpenAI expanded access and enhanced its search tool with new features, including making it available in its much-lauded Advanced Voice Mode.
Similarly, Google is betting heavily on its AI Overviews product, and the company recently announced that AI Overviews would soon be upgraded with Google's latest and greatest foundation model Gemini 2.0 Flash. The model is expected to give AI Overviews the capability to solve complex math and coding questions.
