By Ateev Bhandari and Arasu Kannagi Basil
(Reuters) -Glean said on Tuesday it was valued at $7.2 billion in its latest funding round – the third capital raise for the U.S. enterprise AI search startup in less than two years.
The round marks a nearly 57% jump in valuation for Glean, underscoring strong investor appetite for startups leveraging AI use cases. In the previous funding in September, the company’s valuation had more than doubled in just over six months.
Businesses and governments worldwide are rushing to adopt artificial intelligence, with applications ranging from enterprise productivity and drug discovery to infrastructure and beyond.
Palo Alto, California-based Glean raised $150 million in the funding round led by asset manager Wellington Management.
Startups are choosing to stay private for longer, raising larger funds in late-stage rounds, as public market recovery remains slow.
“Founders avoid the volatility of public markets and employees receive secondary-market liquidity via structured rounds,” said Michael Ashley Schulman, partner at Running Point Capital Advisors.
Glean, which surpassed $100 million in annual recurring revenue in its last fiscal year, was founded in 2019 by a team of former Google search engineers. It uses AI assistants and large language models to generate personalized answers to queries.
According to Schulman, Glean’s 72x valuation multiple on revenue is “punchy”, but investors are getting “early access to a franchise” since the company is cash-flow positive.
Earlier this year, the company rolled out its Glean Agents offering, which allows businesses to use AI to automate operations. It is on track to support 1 billion agent actions by the end of 2025, the company said.
Industry leaders have hailed AI-based agents as a transformative-use case of the technology. Microsoft CEO Satya Nadella has also suggested that the agents will disrupt how we use software-as-a-service, a business model that has long been the staple of software startups.
(Reporting by Ateev Bhandari and Arasu Kannagi Basil in Bengaluru; Editing by Shinjini Ganguli)