Perplexity is a year-old AI startup whose conversational “answer engine” has gained attention as a potential challenger to conventional search. Two months ago the venture raised $73.6 million in Series B funding from investors including Nvidia and Amazon founder Jeff Bezos via his Bezos Expeditions, resulting in a valuation of about $520 million. Now the company is said to be finalizing another cash infusion that is predicted to double its valuation to roughly $1 billion. The current financing round is reportedly being led by former Y Combinator partner Daniel Gross through his own investment fund.

The “funding frenzy” is a sign that certain venture capitalists “think AI technology could challenge Google’s yearslong grip over search and breathe new life into startups after a bruising couple of years,” reports The Wall Street Journal. Perplexity’s Series B round is “the largest sum raised by an Internet-search startup in recent years.”

Still, the company has its work cut out for it, according to WSJ, which notes that “past efforts to dislodge Google in search haven’t gone so well.”

Quartz says Perplexity isn’t afraid to try, describing its “advanced answer engine” as featuring “a conversational interface, contextual awareness from its conversation with the user, and personalization to learn a user’s interests and preferences.” Predictive text capabilities are then used to generate responses, along with source citations.

Central to the Perplexity engine is retrieval-augmented generation, or RAG. “Invented by researchers at Meta, the University of London, and New York University, RAG pairs generative AI with a ‘retriever’ that can find and then reference specific data from a vector database, which is passed to the ‘generator’ to produce a response,” reports IEEE Spectrum.

In February, South Korean communications giant SK Telecom announced a partnership with Perplexity to offer its subscribers “the paid version of Perplexity for free” as an alternative to Google, and gain access to “proprietary models to build personal AI assistant products with access to real-time information,” per Reuters.

Founded in 2022, Perplexity has reportedly passed the $10 million annual revenue mark, with visits via mobile and desktop growing to an estimated 50 million users as of February, an 8.6 percent increase over January, according to Similarweb.

In a January blog post, Perplexity AI co-founder and CEO Aravind Srinivas wrote that the platform has “grown to 10 million monthly active users” and “served over half a billion queries in 2023,” adding that there has been more than a million mobile downloads on iOS and Android.

Related:
Perplexity AI at AWS re:Invent 2023, AWS Video