Surge in AI Venture Deals: Anthropic Perplexity and Abridge's Rise

0:00For a very small second earlier this year, it looked like venture capitalists and their insatiable hunger to invest in AI startups was starting to slow down because of really high prices. and a lot of competition from companies like Google and some of the big players. But in recent weeks, we've seen investors really pick up their enthusiasm the same as they had last year. And startups are looking to really capitalize on that and are starting to raise larger amounts of money. So today on the podcast, I'll be covering everything that I am seeing in startup land, specifically for AI startups and fundraising.

0:36And I want to mention that my own startup, AI Box, is currently fundraising. there are three days left in our crowdfunding campaign and we're raising money on republic so if you're interested i'll leave a link in the show notes to republic where you can check out our campaign we've raised over three hundred thousand dollars on republic and a hundred thousand dollars off to create a no-code ai app builder and marketplace that i believe is going to completely revolutionize the way people use and automate tasks with ai tools so i'm super excited about that. And I'll leave a link in the description.

1:11So you can check out our project, what we're doing and how much we have raised, but let's get into the episode. So the important thing here to know is that we have a couple of big players, we have scale, we have anthropic, they're picking up really big venture deals. Scale, which is of course, kind of known for its image and text labeling services that train AI models is currently in discussions with investors about raising another round of funding. Their CEO, Alexander Wang, has reported that they're aiming for a funding round that would value them at around$14 billion. This is double the valuation that they set three years ago, so this is quite significant.

1:51And I think the AI search engine startup perplexity has also attracted a bunch of, I believe, unsolicited offers that value it at over a billion dollars. this is a really big increase from their valuation just a month earlier absolutely phenomenal we also have huge corporate giants we have um you know tell we have qualcomm and intuit that have joined a 15 billion dollar valuation funding round for anthropic this is the of course the ai firm that is developing llms that rival open ai they have the clod model which is really good and this is part of a$750 million special purpose vehicle, which is organized by Menlo Ventures.

2:36So in addition to all of this, Abridge, which is a company specializing in transcribing medical conversations, has recently secured funding that values them at around$850 million post-investment. That was recently led by Lightspeed Ventures and also Redpoint Ventures. But I think, you know, driving all of this, these huge wave of investments is really just the evidence of AI startups growing their revenue stream. So even in the face of a ton of competition, right, you have huge companies like Google, Amazon, Meta, OpenAI, who have all achieved, you know, I believe ChatGPT has recently achieved a$1.6 billion annualized revenue pace, which is, you know, in discussions around a potential$100 billion valuation fundraising effort, where I think mostly that is for their employees to kind of sell their shares, but they may also raise more money.

3:34So I think there's so much going on. There's a ton of companies investing. There's a ton of companies raising money. There's an interesting quote I heard from Darian Shazai, who's a general partner at Gradient Ventures. He said, last year, more of the research type companies with no products were getting large sums of capital just because they had top AI researchers. I think, and then he said, now we're seeing AI businesses getting funded that are real companies with real business models and revenue. I think this is definitely a trend we'll see, right? People want you to have launched, they want you to be scaling and to have traction to prove you a product market fit.

4:14So scale AI, I think really kind of shows the whole sector's revenue potential. They have reports indicating a 150 % increase in revenue last year. So that's passing$670 million. And all of this is despite not needing, you know, like they don't need this capital immediately, but they're still engaging with investors in anticipation of a future public offering. So they're quite active with investors right now. So Together AI, which is a pretty, I think this is a relatively new startup. up. They are also making a bunch of waves. They just raised over$100 million in a round that valued them at more than a billion dollars.

4:56This is, you know, marking essentially a valuation, which is double from just four months ago when I believe they're closer to 500 million. And the company right now really just facilitates developers access to NVIDIA server chips for AI model training. And they have seen a huge uptick in their revenue, which I think is really showcasing kind of how much demand we have in the market right now for AI technology. So all of this enthusiasm for AI investments, I think is continuing to be super strong, even as a lot of startups are kind of facing challenges in funding, or considering selling due to, you know, the competitive landscape.

5:35There's a lot of companies that raise money in 2021 that did not reach product market fit, that are, you know, struggling. But in, you know, as a lot of those companies are struggling, we're having this huge new kind of wave of AI companies that are doing really incredible things, have product market fit, are scaling, and these are the ones that are really winning the day and able to raise large sums of money. So Perplexity AI, despite some earlier concerns about competition and the cost of AI model training, has seen a huge surge in investor interest. This, of course, is buoyed by its kind of growing annual recurring revenue from subscription sales.

6:10So the startup's revenue growth position really, I think, is kind of positioning it to get a bunch of big investors and to become kind of a kind of a real big player in the space. They had investments from Jeff Bezos and a bunch of other notable investors. So Perplexity is doing a phenomenal job. There's so many of these companies that are doing a really great job. We're excited to see how this progresses, what other companies raise money. I'll definitely keep you up to date on all of that. And don't forget to check out the Republic crowdfunding campaign for AI Box, my very own AI startup, where we are raising our pre-seed round.

6:45Link in the description. Hope you have a fantastic rest of your day.