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Perplexity, the artificial intelligence search engine, is finalising a funding round that would value the start-up at $14bn, a $5bn jump from the valuation it secured six months ago, as it capitalises on a hot market for AI investments.
The $500mn round is being led by venture capital firm Accel, according to two people with knowledge of the deal. It would be Perplexity’s fifth funding round in less than 18 months.
Perplexity, which aims to break Google’s two-decade dominance of the search market, is among a new generation of AI start-ups that have attracted intense interest from investors.
The San Francisco company closed its previous round in December at a $9bn valuation. It originally sought new funding at a $18bn valuation, according to multiple people familiar with the raise, but one investor said backers were not prepared to double Perplexity’s price.
Previous investors include Nvidia, New Enterprise Associates, IVP and SoftBank’s Vision Fund 2. A number of Big Tech heavyweights have also backed the company, including Amazon founder Jeff Bezos, OpenAI co-founder Andrej Karpathy, Google AI executive Jeff Dean and Meta’s Yann LeCun.
Perplexity offers an AI search chatbot that aims to rival offerings from Google and OpenAI. Chief executive Aravind Srinivas told the Financial Times last month that Perplexity would need more cash to fund its future products and build its user base.
“We are serving like 30mn users right now, but if you want to be a product that gets to 100mn or 500mn, the kind of scale you need to be considered Big Tech, that does need more capital,” he said.
The company recently launched a voice mode, which allows users to instruct the AI search through voice commands on Apple devices, such as sending emails and finding videos on YouTube.
Perplexity plans to match rivals OpenAI and Anthropic in offering an “agentic browser”, called Comet. These tools autonomously open a web browser and search online much like a human would in response to user commands.
One person close to the company said a main reason for the latest fundraising was to fund development of the browser, which would aim to be a Google Chrome replacement. The new funding was first reported by The Wall Street Journal.
Perplexity makes the majority of its revenue through premium subscriptions. It says its annualised revenues — a projection of full-year revenues based on extrapolating the most recent month’s sales — grew last year from $5mn in January to $35mn in August.
Perplexity and Accel declined to comment. Last month, Srinivas said that “inference [the computing power needed to process user requests] and infrastructure eats the majority of the costs” and that the company had good cash reserves.
“It is not very common for companies to have this much capital, valuation and revenue, but so few people.” Perplexity employs about 200 staff.
“It is going to be expensive to do the browser and these agents,” he added.
