Perplexity, the AI-powered search startup challenging Google, has secured $200 million in fresh funding at a $20 billion valuation, according to The Information. The deal comes just two months after the company raised $100 million at an $18 billion valuation.
Since its founding three years ago, Perplexity has raised $1.5 billion in total funding, according to PitchBook. It’s not yet clear who led the latest round. Bloomberg previously reported that the July financing was an extension of a $500 million round at a $14 billion valuation, led by Accel.
Revenue Momentum
A source close to the company said Perplexity’s annual recurring revenue (ARR) is nearing $200 million. Last month, the company’s communications head said its ARR had already surpassed $150 million.
Perplexity is positioning itself directly against Google’s dominance in search. In August, it offered to acquire Google’s Chrome browser for $34.5 billion, following the Justice Department’s suggestion that Google might need to sell Chrome to address antitrust concerns. Earlier this month, however, a federal judge ruled that Google will not need to break up its search business, shutting down that possibility.
What The Author Thinks
The funding round shows that investors believe Perplexity has the momentum to challenge Google, but money alone won’t guarantee success. The search market is notoriously difficult to disrupt because users rarely change habits once they’re locked in. If Perplexity wants to justify its $20 billion valuation, it will need to prove it can deliver not just a better search experience, but one compelling enough to lure people away from Google’s ecosystem.
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