Perplexity AI Raises $25.6 Million, Launches iOS App
Conversational search is a big deal according to new data
Perplexity AI announced a $25.6 million series A funding round led by New Enterprise Associates. Other participants included Databricks Ventures, and individual investors “Elad Gil (Founder, Color Health), Nat Friedman (Former CEO of GitHub), Jeff Dean (SVP, Google AI) and Bob Muglia (Former President of Microsoft), as well as new investors Susan Wojcicki (Former CEO of Youtube), [and] Paul Buchheit (Creator of Gmail).”
Seed round investors included Gil and Friedman, along with “Pieter Abbeel (UC Berkeley, AIX Ventures), Yann LeCun (Chief Scientist, Meta), Andrej Karpathy (Founding Member, OpenAI), Ashish Vaswani (Lead Inventor of Transformer), Amjad Masad (CEO, Replit), Clem Delangue (CEO, HuggingFace), [and] Oriol Vinyals (VP of Research, DeepMind).” That’s a pretty impressive list of investors in both rounds.
2 Million MAUs, Half on Mobile
The early investors’ faith in Perplexity seems well-founded so far, as the company announced two million monthly active users (MAUs) since the first version of the product launched in December. Half of those users access Perplexity on mobile via a web browser.
Mobile users now have the option of using the Perplexity AI iPhone app. It has the same features as the web version, such as answers and source citations, and also includes a microphone so you can speak your search queries. The app is up to #14 in the free utilities chart, behind Google (#1) but ahead of DuckDuckGo (#23). The New Bing app is #21 in the productivity category, so it is hard to compare the solutions head-to-head.
Conversational Search Rising
Conversational search is already shaking up the market. A recent Reuters article showed that Bing’s traffic growth had outperformed Google since Microsoft debuted the new GPT-4 features in the search engine in February. This change is from a much smaller base of search traffic, so the gains are likely immaterial from Google’s perspective today. Still, they are gains and may indicate the start of a loyalty shift away from Google's hegemony.
In the five weeks after Microsoft started to slowly make the Bing Chat conversational search features available, Bing’s app downloads grew eight times from about 100k in the five weeks preceding the launch to 810k five weeks later. During that same period, Google app downloads declined by 2% from 2.98 million to 2.91 million. That 70k decline accounts for less than 10% of Bing’s rise.
This tells me that consumers are considering a search alternative to Google for the first time in many years. Microsoft is getting new attention for Bing because of Microsoft’s marketing machine and its alignment with OpenAI. Some of this consideration for a search alternative to Google is likely also fueling growth for companies like Perplexity AI.
What do you think? Are you switching some of your searches to Perplexity or Bing? I’ve switched about half of my search to Perplexity AI since January because the results are richer than the traditional ten blue links, and I can easily extend or refine the search through additional conversational inputs. It’s a superior experience.
