Perplexity reportedly near $500M funding round at $14B valuation

Search engine startup Perplexity AI Inc. is reportedly in late-stage talks to raise $500 million from investors at a $14 billion valuation.

The Wall Street Journal and CNBC broke the news today, citing sources familiar with the matter. Accel is believed to be leading the investment. The fundraising push follows a year in which Perplexity closed four funding rounds cumulatively worth more than $900 million.

The company’s most recent raise in December valued it at $9 billion. The new round that Perplexity is reportedly negotiating is expected to boost that number by more than 50%, but Perplexity had originally sought an even bigger increase. In March, CNBC reported that the company had planned to raise up to $1 billion at an $18 billion valuation.

Perplexity’s flagship offering is a search engine that uses large language models to answer user queries. Rather than displaying a list of web links, the service answers questions directly in a natural language format. The company had more than 15 million monthly users as of last April.

Perplexity generates revenue through two two paid versions of the service. One plan is geared toward individuals, while the other, Enterprise Pro, is designed for organizations. The latter edition allows workers to ask questions about their company’s internal records and business datasets from third-party providers.

In January, Perplexity moved into the developer tooling market with the launch of a service called Sonar. It’s an application programming interface that companies can use to integrate AI-powered search features into their software. Sonar is powered by an eponymous family of custom large language models.

In the four months since the service’s debut, Perplexity has introduced several more Sonar-branded services for developers. One, Sonar Reasoning, uses DeepSeek-R1 to answer complicated queries such as coding advice requests. There’s also a research-optimized API that can run searches across hundreds of data sources to create detailed reports about a topic specified by the user.

The new funding round that Perplexity is reportedly raising could help it further expand its developer tooling portfolio. OpenAI, which has raised tens of billions of dollars more, offers APIs with similar features as Sonar. One way Perplexity could differentiate its offerings using the new funding is by replacing the DeepSeek-R1 implementation in Sonar Reasoning with a custom model.

Perplexity’s consumer business would likely also benefit from the capital injection. In February, the company announced plans to launch an AI-powered browser called Comet. The application will reportedly feature “agentic search” features, which suggests that it’s set to provide integrations with Perplexity’s search engine or Sonar.

CNBC reported today that the company is generating just under $100 million in annual recurring revenue. 

Image: Perplexity