Perplexity AI in talks to raise funds at $18 billion valuation, source says

Perplexity AI in talks to raise funds at $18 billion valuation, source says

  • 20.03.2025 19:03
  • msn.com
  • Keywords: AI, Startup

Perplexity AI is in talks to raise funds at an $18 billion valuation, doubling its previous value, while Alphabet's $32 billion acquisition of Wiz offers VC investors massive returns, with some seeing over 200x returns.

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Estimated market influence

Perplexity AI

Negativesentiment_dissatisfied
Analyst rating: N/A

The company has faced accusations from media organizations, such as News Corp-owned outlets, Forbes and Wired, that the startup engages in plagiarism and copying of its content.

Alphabet

Alphabet

Positivesentiment_satisfied
Analyst rating: Buy

Alphabet's Google agreed to buy Wiz for $32 billion, promising a windfall for VC backers.

Context

Perplexity AI Fundraise and Market Implications

  • Valuation: Perplexity AI is in talks to raise funds at an $18 billion valuation, doubling its previous valuation of $9 billion reported in November.
  • Investors: Backed by Amazon founder Jeff Bezos and Japan's SoftBank Group.
  • Product: An AI-powered search tool competing with ChatGPT and Google's Gemini.
  • New Features:
    • Teased a new web browser, Comet, capable of complex queries, task execution, and decision-making.
    • Introduced Deep Research feature for comprehensive reports through extensive data analysis.
  • Investor Sentiment: Growing adoption of chatbots and AI agents has increased investor enthusiasm.
  • Market Challenge: Aiming to challenge incumbents like Google in the search engine market.
  • Controversies: Accused by media outlets of plagiarism; operates a publisher partnership program.

Implications:

  • Reflects strong demand for AI-driven search tools.
  • Highlights competitive dynamics in the AI space with ongoing feature upgrades.
  • Potential long-term effects include increased investment in AI research and development.
  • Regulatory scrutiny may increase due to market dominance concerns.

Alphabet's $32 Billion Wiz Acquisition

  • Deal Value: Alphabet agreed to acquire cybersecurity firm Wiz for $32 billion, marking one of the largest tech acquisitions in recent years.
  • Investor Returns:
    • Seed investors could see returns as high as 200x.
    • Major beneficiaries include Sequoia Capital, Cyberstarts, and Index Ventures.
  • Key Players:
    • Cyberstarts led a $21 million seed round in Wiz in February 2020, valuing the company at $67 million post-money.
    • Sequoia invested $10 million in the seed round and now holds about a 10% stake, potentially reaping $3 billion from the sale.
    • Index Ventures, with an ~12% stake, could receive over $3.8 billion.
  • Founding Team: Wiz’s CEO Assaf Rappaport and his team were previously acquired by Microsoft.

Implications:

  • Demonstrates the power law in venture capital, where a small number of investments generate significant returns.
  • Highlights Alphabet's strategic focus on cybersecurity.
  • Reflects high valuations in tech M&A despite challenges like antitrust scrutiny and high interest rates.
  • Emphasizes the importance of early-stage investments in high-growth startups.