Perplexity raises even more funds to target Google

Perplexity, the AI search engine start-up (and Google rival), is reportedly raising $250M in its latest funding round, valuing the company at between $2.5-3B, following two previous rounds this year.

Perplexity’s previous funding

Perplexity previously raised $74M in January, at a valuation of $540M, and then raised $64M at the beginning of March–in an impressive round led by investors such as  NVIDIA, IVP, NEA, and Jeff Bezos–which valued the company at $1B. Interestingly, although Perplexity is in direct competition with Google, Ex-YouTube CEO (Susan Wojcicki) and early member of Google Brain (Jeff Dean) have both invested in the start-up.  

This rapid succession of investment rounds indicates that investors are strongly backing the start-up that is prepared to take on search giant, Google. But why?

Because of its innovative use of AI to deliver responses to user inquiries, Perplexity caught the interest of a few big customers, early-on, during its initial launch. Some of these big names include Databricks, Stripe, Zoom, NVIDIA, and HP and their customer base now spans across finance, legal, sports, advertising, software, and hardware sectors making it an attractive prospect for investors.

"Cleveland is using Perplexity for researching ticket sales trends, HP for crafting compelling sales pitches, Amplitude for better understanding of the market landscape to generate tailormade marketing pitches, and Zoom for more focused searches."

What is Perplexity?

Perplexity was founded only two years ago by Andy Konwinski, Denis Yarats, Johnny Ho, and Aravind Srinivas. They designed and built an AI chatbot that uses large language models (LLMs) such as GPT-4, Claude 3, and Mistral, alongside custom models, to search the web and offer summaries of the information it finds (complete with citations) to answer users' search queries.

It’s proving to be a popular alternative to Google: it’s already processed 75M more search queries than it did in the entirety of last year, and industry heavyweights–such as NVIDIA CEO, Jensen Huang, who claims he uses it “almost every day”-- are singing its praises.