0:00

Perplexity is on an absolute tear and

0:02

is in talks according to sources that

0:04

are familiar with the matter to raise

0:06

one billion dollars. This is absolutely

0:08

insane. I feel like we've seen of

0:11

the top AI companies, they're able to

0:13

do round after round of funding as

0:15

long as they can show positive user

0:17

growth. There's a handful of these companies

0:19

that are really showing themselves as the

0:21

winner. Perplexity is 100% one of these and

0:23

I've been absolutely blown away by the fact that

0:26

they may not be best known for like... you

0:28

know a foundation model chat gPT although I think

0:30

they have like some of their own tech that

0:32

they'll say they they mix in there but as

0:34

far as being like a quote unquote gPT wrapper

0:36

that a lot of people criticize or make

0:38

fun of well they're raising a billion dollars

0:40

so they're doing a fantastic job they do

0:42

a lot of cool stuff so today on

0:44

the podcast I want to be diving into

0:46

what they're doing with that billion dollars how

0:48

they were able to actually achieve that and

0:51

raise that money and Also, what I think

0:53

this means for the industry going forward in

0:55

the future. So stick around, this is going

0:57

to be a great episode. Before we get

0:59

into it, I wanted to mention that if

1:01

you ever wanted to grow and scale your

1:03

business using AI tools, I have a community

1:05

where every single week I post exclusive...

1:07

a podcast and videos I don't post

1:09

anywhere else, breaking down how to grow and

1:11

scale your business using AI tools. There's over

1:13

50 videos I've been doing this for over

1:16

a year now, and if you want to

1:18

join the community, the link is in the

1:20

description. In the past I had this set

1:23

at $100 a month, it's currently discounted at

1:25

$100 a month, and if you get in

1:27

the discounted price, when I raise the price

1:29

in the future, you'll be locked in at

1:32

that. I would love to have you as

1:34

a member of the member of the member

1:36

of the community. in the description. All

1:38

right, let's get into what's going

1:40

on with perplexity. So the first

1:43

thing is, of course, like the

1:45

big headline is like, oh my

1:47

gosh, they're raising a billion dollars.

1:49

Their valuation is an $18 billion

1:52

valuation. All things considered, like the

1:54

equity they're giving up for a

1:56

billion dollars, is not that much.

1:58

This is really on this, their

2:00

annual revenue and annual recurring revenue

2:03

just came out and it has

2:05

now reached a hundred million dollars.

2:07

So it's interesting, I mean, a

2:09

hundred million dollars in annual recurring

2:12

revenue, if everything froze today, you'd

2:14

say in 10 years they would

2:16

make a billion dollars, they would

2:18

make a billion dollars, obviously

2:20

they're seeing rapid growth and

2:23

that's why they're able to get

2:25

such a high evaluation, so I

2:27

think that's pretty impressive. This has

2:29

went up a ton. This is almost

2:32

double their current valuation.

2:34

So in December, if you

2:36

remember, not very long ago,

2:39

December they raised at a

2:41

$9 billion valuation. And now in...

2:43

April, they are in April, sorry, of last

2:45

year. So we're going to 2024. I

2:47

mean, we're coming to the end of

2:49

March right now, so this is literally

2:52

one year after they reached a billion

2:54

dollar valuation April of 2024 that it

2:56

around there. So one year after a

2:58

billion dollar valuation, they're raising a billion

3:00

dollar cash at $18 billion valuation. This

3:02

is. really, really rapid growth. There's a

3:04

couple things that I think contribute to

3:06

the rapid growth. And of course, this

3:08

is all coming as there's a bunch

3:11

of rumors of a, you know, going around essentially,

3:13

that there is some new competition

3:15

in the AI-powered search space. We

3:17

see Claude adding search, but I really

3:19

believe that's one of the reasons

3:21

why perplexity has actually stayed in

3:24

the market so long has been

3:26

so successful, is because Anthropropics Claude.

3:28

for better or for worse, they

3:30

kind of were like, oh, for

3:32

safety reasons, we want to create

3:34

a contained AI model, we don't

3:36

want to get it out into

3:38

the world. And so, Claude, you

3:40

know, the big competitor, ChatGPT, literally

3:42

did not have internet access. Proplexity

3:45

absolutely exploited this from day one,

3:47

absolutely exploded this from day one,

3:49

literally exploded this from day

3:51

one, literally exploited this from day

3:53

one, branding, and now it's kind

3:55

of interesting if you'll see. revenue

3:58

or usage dip because of that. I'm

4:00

sure perplexity has got a lot of

4:02

things in the works to continue to

4:04

grow, but like that is something I

4:06

think to be aware of. But they

4:08

really milked that at a time when even

4:10

ChatGPT was on and off with their web

4:12

browsing because you know the New York Times

4:15

was suing them for showing like, you

4:17

know, getting behind, like you could essentially

4:19

go and post a, a Paywall New

4:21

York Times article and ChatGIP would like

4:24

summarize it and read it and read it

4:26

to people and read it to people.

4:28

their web browsing off so there's kind

4:30

of been back and forth and Google's

4:33

slow to the game some would argue

4:35

so perplexity really got in this from

4:37

the beginning and because of that I

4:39

think did quite well so I think

4:41

with everything coming into focus this

4:44

is going to definitely be heating up

4:46

a lot of competition you know right

4:48

now its core market is getting

4:50

much more crowded and because of this

4:52

and perplexity has actually teased a couple

4:54

new things. And I think this is

4:57

kind of what they're fundraising on, right?

4:59

When you look at these companies doing

5:01

like a billion dollar fundraising round, you

5:03

know that it's coming from, like, they're

5:05

showing investors something that's not publicly available.

5:07

It's very common, I think, with a lot

5:10

of like the big AI companies that I've

5:12

looked at recently, right as they, like

5:14

they'll kind of do like a big new

5:16

feature announcement, along with a funding announcement. So

5:18

like, hey, we just, you know. Release the ability

5:20

to do this super cool new voice model

5:22

thing and we also just raised 20 million

5:24

dollars They kind of do them in tangent

5:27

and I think it's smart from a branding

5:29

perspective because It's like the news of you know raising

5:31

20 million dollars is definitely going to get out

5:33

there And then they can kind of add their

5:35

new feature on but the thing that I think

5:37

not a lot of people think about is the

5:39

fact that Whatever that new feature was is how

5:42

they got the money. They've been talking to investors

5:44

about it for the last, you know, three to

5:46

six months, however long they did their crowdfunding or

5:48

however long they did their fundraising for. And so,

5:50

you know, you can assume they probably had a

5:52

really cool feature for three months. They don't want

5:54

to just release it and then maybe the feature

5:57

flops or I guess that's kind of a pessimistic

5:59

way to say it. like raising money is all

6:01

about hype. So if they can go to investors

6:03

and say, look at this absolutely incredible

6:05

in-house tool or in-house feature rebuilt, it

6:07

blows all the competitors out of the

6:09

water, we're about to release this, get

6:11

in your funding now because once we

6:13

release it, we're gonna go parabolic.

6:15

This is essentially how these AI companies

6:17

are raising money. And so it's interesting to

6:19

me to see how people are. pairing up

6:22

new feature teases or announcements with these crowdfunding.

6:24

So the new tease out of perplexity is

6:26

they're kind of talking about this $1 billion,

6:28

which no doubt a lot of times the

6:30

teas or the like the leaks are coming

6:32

from investors that see the pitch deck and

6:34

then like share it with reporters. This is

6:37

how a lot of the stuff gets. I

6:39

kind of leaked. Is that a perplexity is

6:41

working on launching a quote unquote agentic browser

6:43

that they're going to call comment. So comment.

6:45

So this is very interesting. dominated this AI

6:47

search space to the point where some people

6:49

are saying, oh, they're going to be a

6:52

competitor to Google. And if you look at

6:54

the actual like usage of web search. You know

6:56

you can kind of see the market like

6:58

Google is not really losing any ground to

7:00

perplexity perplexity is a very tiny You know

7:02

one two percent of the whole search market

7:04

or something very small But people are saying

7:06

but I mean for an you know an

7:08

incumbent like this is actually quite impressive for

7:11

a small startup to get there And so

7:13

now that they're now that they've reached that

7:15

the next place that they're looking at is

7:17

actually owning the browser so if they can

7:19

make an impressive browser like this an agentic

7:21

browser can do all these in a giganticic

7:23

But if they can create a browser that

7:25

people are switching to, then all of a

7:27

sudden starts to threaten perhaps Google Chrome, and

7:29

people will just use this, they're gonna start

7:31

expanding their footprint that way. So I think

7:34

this is very smart. This is what they've

7:36

been teasing. They're also ramping up their enterprise

7:38

offering, so they're working a lot more with

7:40

companies. I have seen a ton of universities,

7:42

for example, using perplexity in a lot of

7:44

people. They have a deal essentially where if

7:46

you get like. uh... you know fifty people at your

7:49

university to sign up for clod then everybody

7:51

at your university gets it for free for

7:53

a year or something like that or sorry

7:55

not clod for perplexity and i think this

7:57

is absolutely genius is a great

7:59

marketing this thing isn't probably insanely expensive and their

8:01

cost their acquisition cost plus they know that if

8:04

they're at universities are people that are going to

8:06

go into the workforce most likely and probably be

8:08

power users so I think this is really smart

8:10

they've done a lot of this with enterprise with

8:12

universities they have a lot of these kind of

8:14

offerings they're ramping up and they are they've recently

8:16

launched an AI search engine that helps essentially businesses

8:18

get information from their internal documents. So they're pulling

8:21

out all this new stuff. I think the internal

8:23

documents thing is really cool. If you have a

8:25

bunch of internal documents to your company that obviously

8:27

are online, you can't ask chatGPT about them. Now

8:29

you can ask perplexity about them. And you can

8:31

tie perplexity into chat, GPT, Claude, Mistrol, and every

8:33

other AI model. So I think perplexity is doing

8:35

something very, very good there. And I'm really excited

8:38

to see how this new fundraen. how they're actually

8:40

able to raise that, what the new features are.

8:42

And so cool stuff coming out of perplexity. I'll

8:44

definitely keep you up today on all of that.

8:46

When this billion dollars of funding closes. Thanks so

8:48

much for tuning in to the podcast today. I

8:50

hope you learned something new and that this was

8:52

insightful. If it was, I would appreciate a review.

8:55

It means the world to me, honestly. I read

8:57

all your reviews. Yeah, really, really do appreciate them.

8:59

So, thanks so much for tuning in and if

9:01

you're joining in, and if you're interested in joining

9:03

in, joining in, and if you're joining in, and

9:05

if you're joining, and if you're joining, and if

9:07

you're joining, and if you're joining, joining, and if

9:09

you're joining, and if you're joining, joining, and if

9:12

you're joining, and if you're interested, joining, joining, and

9:14

if you're interested, joining, and if you're joining, and

9:16

if you're joining, joining, and if you're joining, and

9:18

if you're And in the show notes, you could

9:20

check that out. Amazing community, over 300 members, and

9:22

I learn things all the time, and I share

9:24

every single week videos there on how to grow

9:26

and scale your business with AI. Thanks so much

9:29

for tuning in, and I will catch you next

9:31

time.