Search startup Perplexity AI has raised $73.6 million from a group of investors including Nvidia and Amazon founder Jeff Bezos, the latest example of investors hunting for AI startups that challenge incumbents, according to Reuters report.
The round was led by venture capital firm IVP and valued the company at about $520 million, according to the company. NEA, NVIDIA, Databricks, and Bessemer Venture Partners also participated in the round.
Perplexity’s search tools enable users to get instant answers to questions with sources and citations. It is powered by a variety of large language models (LLMs) that can sum up and generate information, from OpenAI to Meta’s open-source model Llama.
San Francisco, California-based Perplexity AI, which raised $25.6 million in March last year in a round led by NEA, said it has served more than 500 million queries in 2023 while spending few marketing dollars.
The company plans to use the funding to hire and build the products. It now has 38 people and plans to reach about 60 by the end of this year.
Its website and mobile web had 45 million visits in December, up from 2.2 million when the service became available in December 2022, according to Similarweb data.
Despite its fast growth, the company, which is not profitable and generates single-digit million revenue annually, is a moonshot in the online search market where Google has about 90% market share.
Microsoft, the backer of OpenAI, has been integrating AI into search engine Bing in the past year but so far failed to take major market share away from Google.
Aravind Srinivas, chief executive at Perplexity, said the startup’s advantage lies in its focus and ability to fine-tune a variety of top-performing AI models instead of locking into one.
“Google is going to be viewed as something that’s legacy and old, and Perplexity will be viewed as something that’s the next generation and future,” said Srinivas.
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