San Francisco-based AI search startup Perplexity AI has finalized a $500 million funding round led by Institutional Venture Partners (IVP), boosting the company’s valuation to an impressive $9 billion.
This new round follows Perplexity’s rapid growth in 2024, where it raised its valuation from $520 million at the start of the year to $3 billion by mid-year.
Challenging Giants in Generative AI Search
Positioned as a competitor to Google Search and OpenAI’s ChatGPT, the platform has gained traction for its ability to provide conversational, real-time responses by scanning the web for up-to-date information. With more than 2 million app downloads and approximately 230 million monthly searches, the platform continues to grow its user base. Unlike traditional search engines, Perplexity delivers instant answers, summarizing information without the need for multiple links.
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Revenue Strategies and Enterprise Expansion
The AI company offers a premium subscription for advanced features and recently rolled out an enterprise-grade version of its search engine designed to assist businesses by processing both public and internal data. With future plans to integrate ads, the San Francisco based company also launched a revenue-sharing model with major media outlets to address copyright concerns. Key partners like Fortune, Time, and The Texas Tribune have joined this initiative, which compensates publishers when their content contributes to Perplexity’s generated answers.
Investor Confidence in Generative AI’s Future
The investment underscores confidence in Perplexity’s ability to compete with leading tech giants, with Chief Business Officer Dmitry Shevelenko emphasizing the platform’s potential to drive significant value for publishers and enterprises alike.
