AI chatbot startup Character.AI valued at $1 billion after raising $150M in funding led by Andreessen Horowitz

Character.AI, an artificial intelligence start-up founded by two former Google employees, has raised $150 million in Series A funding led by Andreessen Horowitz. Existing investors, including Nat Friedman (former GitHub CEO), Elad Gil, SV Angel, and A Capital also participated.

A.I. chatbot startup Chaacter.AI valued at $1 billion after raising $150M in funding led by Andreessen Horowitz

The round puts the company at a $1 billion valuation, making it a new member of our highly coveted unicorn club. Character.AI will use the fresh capital infusion to accelerate growth and expand its compute abilities resulting in a more sophisticated model with advanced reasoning and greater accuracy. The funding proceeds will also help the company grow its 22-person team and add technical abilities.

In conjunction with the funding, Character.AI also announced that Andreessen Horowitz General Partner Sarah Wang will join its board of directors.

The announcement comes just three months after the successful launch of the widely popular OpenAI ChatGPT. Since then, investors and venture capital firms have been pouring into the red-hot generative AI space as they look for the next AI winner.

Founded in 2021 by two former Google engineers Noam Shazeer and Daniel De Freitas, Character.AI offers “users the ability to create a fully-customizable and personalized AI companion with a distinct personality and values.” The two co-founders helped created the architecture used in popular chatbots before leaving Google in 2021 to launch Character.AI

“Daniel and I are pleased that a world-class group of investors, led by the amazing team at a16z, believes in the remarkable advancements we’re making in AI, the company we’re building, and the value we can deliver to society and investors. We are gratified they recognize our ability to revolutionize AI and improve the way people live,” said Shazeer.

“Character.AI’s power is our highly-sophisticated language model, which rapidly analyzes and contextualizes large volumes of information to produce useful intelligence tailored to each individual, making it a personalized superintelligence companion that enhances productivity, offers advice, educates, and entertains. The potential use cases are infinite,” Shazeer added.

Since its beta launch in September 2022, the two-year-old startup said it has experienced rapid growth and it’s “nearing 100 million monthly site visits, a four-fold increase in two months.”