Perplexity AI, the fast-growing AI-powered search engine startup, is reportedly in early talks to raise up to $1.5 billion in fresh funding — a move that could double its valuation to $18 billion. If successful, the deal would mark another major leap for the company, which was valued at just $9 billion in December 2024 and $1 billion barely a year earlier.
Founded in 2022 by Aravind Srinivas, Andy Konwinski, Denis Yarats, and Johnny Ho, Perplexity AI has become one of the fastest-growing players in the AI search market. The company’s rapid rise reflects soaring investor interest in generative AI and chat-based search engines capable of challenging traditional platforms like Google.
Perplexity’s financial momentum is staggering. With annual recurring revenue now hitting $100 million, this new valuation would put its revenue multiple at 180x — far exceeding the typical benchmarks for both AI startups and SaaS companies. For comparison, rivals like Anthropic project a 30-40x multiple, while OpenAI’s latest round values it at around 43x revenue.
Perplexity’s meteoric valuation growth is turning heads across the tech and VC world. In January 2024, the company raised $73.6 million in Series B funding led by IVP, with support from Nvidia, Jeff Bezos, and other big names — hitting a $520 million valuation.
Just two months later, by March 2024, it secured another $63 million, jumping to $1.04 billion and officially entering unicorn territory. This round saw investments from AI heavyweights, including Daniel Gross, NVIDIA, Jeff Bezos, Stan Druckenmiller, Tobi Lutke, and Garry Tan.
By April 2024, Perplexity was chasing an additional $250 million at a $2.5 to $3 billion valuation. The momentum kept building, and by November, it had locked in $500 million at a staggering $9 billion valuation, tripling its worth in just months.
Now, the company is back in talks to raise another $1 billion or more, potentially pushing its valuation to $18 billion — doubling its value yet again in less than a year.
Industry insiders say the intense fundraising pace is partly driven by the high cost of computing power needed to run AI search engines at scale. One investor noted, “Computing is costly, so they might need to raise funds.” But it’s not just about costs — Perplexity AI’s explosive growth is also luring investors eager to ride the AI boom.
“They’re in a zeitgeist moment,” another investor added. “The growth is real, and everyone wants in.”
Perplexity’s product stands out by blending AI-generated narrative answers with linked citations, offering users a more integrated and useful search experience than traditional engines that serve up endless links.
As competition heats up, Perplexity AI is expanding beyond core search. The startup is developing Comet, an “agentic” browser designed to further integrate AI into user experiences. It’s also rolling out enterprise tools that enable companies to search internal documents using AI — a potentially lucrative market.
Advertising could also become a new revenue stream. Perplexity is exploring ad integration, though it’s still testing models to ensure ads don’t disrupt the user experience.
In a surprising strategic twist, Perplexity AI recently floated a proposal to merge with TikTok’s U.S. operations. The January 2025 plan — revised after feedback from the Trump administration — would create a new U.S. holding company called “NewCo”, combining Perplexity’s AI search with TikTok’s vast social platform.
The proposed deal is massive. The combined entity could be valued at $300 billion, with the U.S. government potentially owning up to 50% (non-voting) post-IPO. ByteDance would retain control of TikTok’s recommendation algorithm while transferring the U.S. operations to NewCo for equity.
While ByteDance hasn’t officially responded, the move signals Perplexity’s ambition to scale rapidly and carve out a powerful position in both search and social media.
Though Perplexity AI hasn’t confirmed IPO plans, its aggressive fundraising and valuation growth have sparked speculation. Industry analysts suggest that hitting $250 million in ARR could open the door to an IPO as soon as 2026 or 2027.
Still, with this potential $1.5 billion funding round, Perplexity may not need to rush toward public markets. The fresh capital would give the company room to scale, refine its product offerings, and cement its place as a leading player in AI-powered search.
Whether through a blockbuster IPO or a groundbreaking merger, Perplexity’s trajectory is shaping up to be one of the most dramatic stories in the AI startup world. As the race for AI search dominance intensifies, Perplexity is betting big — and investors are lining up to fuel its next chapter.
