AI startup You.com is raising $50M in funding to pivot from AI-powered search engine to AI assistant market

In 2021, we reported on You.com, an AI startup that raised $20 million in funding to take on Google with a more customizable search engine that summarizes web content. Three years later, You.com appears to be pivoting towards the AI assistant market, facing challenges as some users sought alternatives.

Now, according to Reuters, You.com is reportedly in the process of raising $50 million in new funding to establish itself in the expanding AI assistant market. This nearly completed Series B round would value the company, officially known as SuSea Inc., between $700 million and $900 million, according to sources. Since its inception, You.com has handled 1 billion user queries.

Interest in You.com’s AI-enhanced search engine surged with the advent of ChatGPT in early 2023, but some users soon drifted away, Reuters reported. Competitors like Microsoft, with its revamped AI-powered Bing, and Google, with its AI-generated responses for complex queries, intensified the competition.

Despite a year-to-date increase in web traffic, You.com’s 11 million visitors in May fell short of the 20 million peak in February 2023, based on Similarweb data. Sensor Tower reported a 69% drop in app downloads for You.com in 2024 compared to the same period in the previous year, reflecting broader challenges faced by AI startups.

Amid these challenges, the Palo Alto-based company has evolved You.com into an AI assistant focused on both productivity and internet search, as highlighted on its website.

Founded in 2020 by former Salesforce AI scientists Richard Socher (CEO and Chief Scientist) and Bryan McCann, You.com is an innovative AI chatbot and search engine. It leverages a Large Language Model (LLM) to provide personalized, human-like responses to user queries.

Earlier this year, Socher told Reuters that You.com could generate prose, write code, and navigate various technologies to find accurate answers for users. Socher did not respond to a recent request for comment.

The market for advanced AI assistants is competitive and rapidly growing, with major players like Google, Microsoft, OpenAI, and now Apple introducing new capabilities to millions of users.

You.com offers a premium consumer subscription at $15 per month when billed annually, providing access to top AI models and productivity tools. In comparison, similar subscriptions from Google, Microsoft, and OpenAI are priced around $20 per month.