Perplexity AI, a rising star in the AI-powered search engine space, is in early talks to raise up to $1.5 billion in fresh funding. If successful, this round could skyrocket the company’s valuation to an impressive $18 billion—double what it achieved just months ago. The San Francisco-based startup, founded in 2022 by Aravind Srinivas, Andy Konwinski, Denis Yarats, and Johnny Ho, has stunned the market with its rapid climb from a $1 billion valuation in April 2024 to $9 billion by the end of that year.
What’s driving this explosive growth? Perplexity has crossed $100 million in annual recurring revenue, pushing its valuation multiple to an eye-popping 180x. That figure dwarfs the revenue multiples of top AI startups, which typically range between 21.8x and 40.6x, and it’s far beyond traditional SaaS norms of 7.8x. In less than 14 months, the company has multiplied its value 34 times—a rare feat, even by AI unicorn standards.
By comparison, major players like Anthropic are projected to reach a valuation between $30 billion and $40 billion based on $1 billion in revenue—a 30–40x revenue multiple. Meanwhile, OpenAI is currently raising at a $150 billion valuation, translating to around a 43x multiple. Perplexity’s financial leap has clearly put it in the upper echelons of AI valuation metrics.
A Record-Breaking Funding Journey
Perplexity’s funding history reads like a masterclass in rapid startup scaling. Back in January 2024, the company secured $73.6 million in a Series B round led by IVP, with participation from big names like Nvidia and Jeff Bezos. At the time, the startup was valued at just $520 million.
Things accelerated quickly. By March 2024, Perplexity raised another $63 million, pushing its valuation past $1 billion and officially earning unicorn status. Notable investors, including Daniel Gross, NVIDIA, and Shopify CEO Tobi Lutke, doubled down on their bets.
In April 2024, the momentum continued. Perplexity sought $250 million more at a valuation of up to $3 billion. Previous backers like NEA and IVP returned to fuel the company’s ambitions. Then, in a blockbuster move, the startup raised $500 million by November 2024, reaching a $9 billion valuation—tripling its worth in just a few months.
Now, with another $1 billion or more potentially on the table, Perplexity could double its valuation once again, reaching $18 billion. Insiders say rising computing costs, especially for AI model training and operations, are a major factor driving this latest raise. One investor noted, “Their growth is phenomenal, and with AI’s heavy infrastructure costs, raising capital now makes strategic sense.”
Shaking Up AI Search with Innovation and Expansion
The AI search race has become fierce. Big players like Google are now testing AI-powered search experiences, while companies like Anthropic have added search features to their AI assistants.
Perplexity stands out by blending AI-generated answers with traditional web search. Instead of simply listing links, the platform delivers narrative responses backed by real citations—an approach that’s resonating with users seeking clarity and depth.
Looking ahead, Perplexity is expanding its horizons. The company is developing a new AI-powered browser, Comet, designed to offer “agentic” browsing experiences beyond standard search. It’s also strengthening its enterprise solutions, allowing companies to search internal documents using Perplexity’s AI capabilities.
Advertising is another potential revenue stream. Though still in the experimental phase, the startup is testing various ad models as it scales toward profitability.
Ambitious Merger Talks with TikTok Could Change Everything
In a surprising twist, Perplexity proposed a bold merger with TikTok’s U.S. operations earlier this year. The January 2025 offer—revised following feedback from the Trump administration—aims to form a new U.S.-based holding company, “NewCo,” that combines both businesses.
The proposal includes high-stakes terms. The U.S. government could receive up to 50% ownership (non-voting) post-IPO, with the combined entity targeting a minimum $300 billion valuation. This ambitious plan would catapult Perplexity far beyond its current worth, offering a potential fast track to the public markets.
ByteDance, TikTok’s parent company, would retain control over TikTok’s recommendation algorithm while transferring U.S. operations to NewCo in exchange for equity. Although ByteDance hasn’t formally responded, the proposal has reignited optimism. Trump recently reversed his stance on TikTok, hinting at possible approval if a deal comes together.
IPO Rumors Swirl, But Timeline Depends on Growth
With its blistering pace of growth and aggressive fundraising, speculation around a Perplexity IPO is mounting. Industry insiders believe the company could go public as early as 2026 or 2027—once it hits key milestones like $250 million ARR and demonstrates sustainable financials.
The potential $1 billion raise would give Perplexity enough runway to delay going public while cementing its status as a major AI search contender. However, if the TikTok merger materializes, it could drastically accelerate the IPO timeline and reshape the startup’s future.
Regardless of the path it takes, Perplexity is poised to become one of the most valuable AI companies in the world. Its unique search model, aggressive growth, and strategic moves show that it’s not just riding the AI wave—it’s helping shape it.
