Perplexity AI's latest large funding event could quickly be replaced by another, much larger round of capital, TechCrunch reports. Yes, the $62.7 million the startup raised at a valuation of just over $1 billion could quickly be trampled by a raise of up to $250 million at a valuation up to 2.5 to 3 times higher.
what's the matter? That's rapid revenue growth for a company that reportedly has annual recurring revenue of about $20 million. Sure, $1 billion is a 50x revenue multiple, but if the company is growing fast enough, an investor paying up to 150x on current ARR may not be as crazy as it looks on paper, even if betting at a similar price. 2021 – Times have often been difficult.
The hype around Perplexity is a big problem. Because it shows that some startups are successful enough to attract large-scale venture investment. good. A concern I've had for some time is that the AI boom will simply enrich existing companies and not foster enough startups to create a new breed of tech giants. My view is that having a permanent technology god is not the best way to drive long-term innovation. And I think search in general is a good indicator of what happens when the big tech companies fail to compete meaningfully with each other.
So the news from Amazon, Microsoft, Meta, and Adobe in the AI space this week felt like a reminder that Big Tech will try to eat up the AI moment. The embarrassment of disparaging Star Wars may simply be one of our main hopes for avoiding Microsoft or Alphabet adding another $3,000 to their market capitalization. Press play and chat!