The confusion of AI search startups is gaining serious momentum. The company will close with a $500 million funding round and push its valuation to $14 billion, the Wall Street Journal reported Monday. This is a rapid jump from the $9 billion mark just six months ago.
This upcoming round will be led by Accel and follow a series of major haars. In December 2024, IVP led rounds pulled in $500 million at a valuation of $9 billion. Prior to that, in January 2024, the company raised $73.6 million at a $520 million valuation more than a year ago. That round included heavyweights such as Nvidia, Jeff Bezos and Elad Gil on the cap table.
“Venture-Capital Firm Accel is set to lead the new round, which is expected to total $500 million.
Perplexity reaches $14 billion valuation in AI search boom
Founded in 2022 by former Google and Openai engineers, Prperxity chases Google’s grass with a very different approach to searching. Rather than throwing lots of blue links on the page, the platform cites the source and provides clean, conversational answers to user queries. It helps to stand out in a space dominated by legacy giants.
Its user base is expanding to over 15 million active users per month, and the company has launched a premium subscription of $20 per month, beginning to contribute to meaningful revenue. It’s a sign that people are not only trying me, but they’re paying for it.
The pace of fundraising and ratings climbing was offensive. Some investors reportedly have made unsolicited offers valued the company at $15 billion. So far, the confusion has not been bitten.
Such attention does not come without a fever. Startups have faced criticism from publishers accusing them of cutting content without proper credit. The confusion responds by pointing out the use of quotations in responses, saying it is committed to transparency about how information is collected.
The wider AI search race is intensifying. Google is pouring resources into the Gemini project, and Openai bullied its ambition to integrate search into the model. But the traction of confusion between both users and investors puts it in a powerful place to continue building, and perhaps even changes the way people search for information online.
Meanwhile, Perplexity is facing competition from key players like Openai’s ChatGPT, and recently added a search feature that provides real-time information on topics such as sports, news, stock quotes and more. The addition of Openai with web partnerships will strengthen its position in the search field.
The Perplexity journey was not without controversy. The startup recently received a “stop and deprecated” notification from the New York Times, accusing them of shaking away content without approval. Confusion denied these allegations, but similar claims have also emerged from media such as Forbes and Wired. In response, Perplexity launched a revenue sharing model that compensates publishers whenever advertising revenue is generated from content.
As the AI sector attracts billions of dollars and competition gets stronger each month, the baffling looks like one of the early winners of the next wave of searches.
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