Perplexity at $51M ARR
Jan-Erik Asplund
TL;DR: Sacra estimates that Perplexity is at $51M ARR, up 1,600% year-over-year. Not a search company or an LLM company, Perplexity's upside case lies in being a product company with more degrees of freedom than either Google or OpenAI. For more, check out our full report and dataset on Perplexity.
Last time we wrote about Perplexity in March 2024, the company had passed $11M ARR just over a year after launch, growing 37% month-over-month. Now, Perplexity plans to raise at an $8-9B valuation, up from $3B at the time of its August Series C.
Key points via Sacra AI:
- Sacra estimates that Perplexity hit $51M in annual recurring revenue (ARR) in October 2024, up 1,600% year-over-year, valued at $3.01B as of their August Series C for a 59x forward revenue multiple. ChatGPT still dwarfs them at $2.9B ARR (up 248% YoY), but Perplexity is closing the gap on Anthropic's consumer chatbot Claude, which grew hit $120M ARR in September (up 596% YoY).
- Rather than compete with Google directly as the universal search bar, Perplexity focuses on the most complex queries (10-11 words), monetizing them at a higher ARPC through prosumer subscriptions ($20/month), enterprise seats ($40/seat/month), and premium-priced ads ($50 CPM to Facebook's ~$14). This multi-tiered approach takes Perplexity into competition with enterprise search players like Glean ($80M ARR) and Hebbia ($13M ARR) which layer on security, compliance & data governance and B2B-specific integrations into their LLM-powered internal search engines.
- Not a search company (they use Google/Bing SERPs) nor a foundation model company (they use multiple LLMs including OpenAI's and Anthropic's)—Perplexity's upside case lies in being a product company with the degrees of freedom to innovate on search UI versus Google (boxed into its 10 blue links and $238B in annual revenue) and to employ the best LLMs and custom models for the job versus ChatGPT (bound to OpenAI's models). This flexibility enables Perplexity's iteration speed and rapid expansion into new search interfaces and verticals—launching Finance, Spaces, Internal File Search, and Reasoning within 10 days in October 2024—while ChatGPT just yesterday launched Search, nearly 2 years after ChatGPT's original launch.
For more, check out this other research from our platform:
- Perplexity (dataset)
- Perplexity: the $11M/year Cliff Notes for the web growing 4,272% [March 2024]
- Anthropic vs. OpenAI
- OpenAI (dataset)
- Anthropic (dataset)
- OpenAI vs. Anthropic vs. Cohere [2023]
- CoreWeave: the $465M/year cloud GPU startup growing 1,760% YoY
- Edo Liberty, founder and CEO of Pinecone, on the companies indexed on OpenAI
- Pinecone: the MongoDB of AI
- Will Bryk, CEO of Exa, on building search for AI agents
- AI talking heads growing 1024%
- Kyle Corbitt, CEO of OpenPipe, on the future of fine-tuning LLMs
- Scale (dataset)
- Databricks (dataset)
- Hugging Face (dataset)
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