AI startup Perplexity surges to $14B valuation amid $500M raise, challenges Google in search war

AI search startup Perplexity is catching serious momentum. The company is closing in on a $500 million funding round that would push its valuation to $14 billion, the Wall Street Journal reported on Monday. That’s a sharp jump from its $9 billion mark just six months ago.

This upcoming round will be led by Accel and follows a string of major hauls. Back in December 2024, Perplexity pulled in $500 million at a $9 billion valuation in a round led by IVP. Before that, in January 2024, the company raised $73.6 million at a $520 million valuation, just over a year ago. That round had heavyweights like NVIDIA, Jeff Bezos, and Elad Gil on the cap table.

“Venture-capital firm Accel is set to lead the new round, which is expected to total $500 million, WSJ reported, citing people familiar with the matter.

Perplexity Hits $14B Valuation in AI Search Boom

Founded in 2022 by former Google and OpenAI engineers, Perplexity is going after Google’s turf with a very different approach to search. Its platform delivers clean, conversational answers to user queries, citing sources as it goes, rather than throwing a bunch of blue links on a page. That’s helping it stand out in a space dominated by legacy giants.

The user base has ballooned to over 15 million active users per month, and the company has rolled out a $20/month premium subscription, which is starting to contribute meaningful revenue. It’s a sign that people aren’t just trying i, they’re sticking around and paying for it.

The funding pace—and the climb in valuation—has been aggressive. Some investors are reportedly making unsolicited offers valuing the company as high as $15 billion. So far, Perplexity isn’t biting.

That kind of attention doesn’t come without heat. The startup has faced criticism from some publishers who accuse it of scraping their content without proper credit. Perplexity has responded by pointing to its use of citations in responses and says it’s committed to transparency in how it gathers information.

The broader AI search race is intensifying. Google is pouring resources into its Gemini project, and OpenAI has teased ambitions to integrate search into its models. But Perplexity’s traction with both users and investors puts it in a strong spot to keep building—and maybe even shift how people look for information online.

Meanwhile, Perplexity faces competition from major players like OpenAI’s ChatGPT, which recently added a search feature that delivers real-time information on topics like sports, news, and stock quotes. Powered by web partnerships, OpenAI’s addition strengthens its position in the search arena.

Perplexity’s journey hasn’t been without controversy. The startup recently received a “cease and desist” notice from The New York Times, which accused it of scraping content without authorization. Perplexity has denied these allegations, but similar claims have also surfaced from media outlets like Forbes and Wired. In response, Perplexity launched a revenue-sharing model that compensates publishers whenever ad revenue is generated from their content.

With the AI sector drawing billions and competition growing fiercer by the month, Perplexity looks like one of the early winners in the next wave of search.