Perplexity AI's $73.6M funding boost propels search engine to $520M valuation

While tech giants like Google have been enhancing their platforms with General AI (GenAI) technologies, a new wave of startups is eyeing to redefine AI-powered search from scratch.

• Funding Matters: Perplexity AI recently raised $73.6M in a funding round. The round, led by IVP, also saw participation from NEA, Databricks Ventures, prominent tech leaders like former Twitter VP Elad Gil, Shopify CEO Tobi Lutke, ex-GitHub CEO Nat Friedman, Vercel founder Guillermo Rauch, Nvidia, and notably, Jeff Bezos. Sources reveal that this funding has boosted Perplexity's valuation to $520M post-money.

• What Do They Do: Unlike conventional search engines, Perplexity offers a unique chatbot-like interface that enables users to ask queries in natural language. The AI responds with a summary containing various source citations, allowing users to ask follow-up questions to delve deeper into a subject.

• Platform and Pricing: Perplexity's platform is powered by several GenAI models, both developed in-house and by third parties. They offer a Pro plan ($20 per month) that provides features like image generation, unlimited use of Perplexity’s Copilot, and file uploads.

• Beliefs: Despite the stiff competition from established players like Google, Microsoft, and other startups like You.com, Perplexity's CEO, Aravind Srinivas, believes that their platform offers more robust search filtering and discovery options.

• Issues at Hand: However, concerns around misuse, misinformation, and copyright persist in the GenAI search tools sector. Vendors argue that their web-scraping practices fall under the fair use doctrine, but many copyright holders disagree and have filed lawsuits seeking compensation.

Despite these uncertainties, Perplexity, co-founded by Denis Yarats and Johnny Ho, which reportedly has 10 million active monthly users, has raised over $100M to date and is keen on expanding its team and developing new product functionality.