Perplexity AI is launching $50 million venture fund to back early-stage startups

Perplexity AI, the tech startup behind a fast-growing AI search engine, is close to securing $50 million for a venture fund aimed at early-stage AI startups, CNBC reported, citing the company’s filing with the U.S. Securities and Exchange Commission (SEC).

While Perplexity will contribute to the fund, most of the capital is coming from external investors, a source familiar with the matter said. The fund will be led by Kelly Graziadei and Joanna Lee Shevelenko, who previously ran early-stage investment firm f7 Ventures. An SEC filing from October shows that Perplexity F7 Fund I is targeting $50 million, with Graziadei and Shevelenko listed as general partners.

“According to a filing with the U.S. Securities and Exchange from October, Perplexity F7 Fund I had filed to raise $50 million. Graziadei and Shevelenko are named as the two general partners,” CNBC reported.

Perplexity has been gaining traction in the AI space since the surge of generative AI tools in late 2022. The company is positioning itself as a potential rival to Google as more users explore AI-powered search. In November, TechStartups reported that Perplexity was close to raising $500 million at a $9 billion valuation.

The company has been making bold moves outside of search, too. Last month, Perplexity put in a bid to merge with TikTok U.S., a move that raised eyebrows as the social platform faces possible regulatory action in the U.S.

On the investment front, Perplexity sees an edge in spotting promising startups. With about 80,000 developers using its API, the company has insight into which AI projects are gaining traction. That visibility could give it an advantage when identifying potential investment opportunities.

The fund will receive backing from Perplexity’s founders and investors, with some of the company’s contribution coming in stock, the source said.

The Rise of Perplexity AI

AI-assisted search has emerged as a significant area of focus for investors, as it poses a potential challenge to Google’s dominance in how people access information online. OpenAI, which ignited the generative AI wave with ChatGPT in late 2022, expanded into search last year with the introduction of SearchGPT. In response, Google rolled out “AI Overviews,” offering users concise answer summaries directly at the top of search results.

The startup saw its valuation skyrocket from $500 million at the start of 2024 to approximately $9 billion by year’s end. The company’s rapid growth was fueled by surging investor interest in generative AI, despite facing accusations of plagiarism along the way.

Perplexity AI’s dramatic rise underscores the broader shift in consumer behavior and investor priorities as generative AI reshapes the landscape of online search and information retrieval.

Perplexity AI was founded in 2022 by Aravind Srinivas, Andy Konwinski, Denis Yarats, and Johnny Ho to redefine search by providing direct answers to user questions. Competing with giants like Google and OpenAI, the company recently launched an iOS app to make its AI-driven search engine more accessible to mobile users.