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SAN FRANCISCO: The startup behind You.com is raising $50 million in new capital as it looks to gain a foothold in the growing market for artificial BroadCast Unitedligence assistants, according to people familiar with the matter.
The upcoming Series B round will value SuSea Inc, the four-year-old company behind You.com, at between $700 million and $900 million, the people told Reuters.
ChatGPT sparked interest in You.com’s AI search engine in early 2023, before some users began looking elsewhere. Microsoft updated its Bing search engine with its own AI chatbot, while Alphabet’s Google added AI-generated answers for more nuanced queries.
Similarweb data shows that You.com had 11 million visits in May, reflecting the growth of web traffic so far this year, but the number is still lower than the peak of 20 million in February 2023. Market BroadCast Unitedligence firm Sensor Tower said that so far in 2024, its app downloads are down about 69% compared with the same period last year. Other AI startups are facing similar headwinds.
Against that backdrop, the Palo Alto, California-based company has transformed You.com into an AI assistant that, according to its website, focuses on productivity and internet search.
You.com can write prose or computer code, and can harness a host of technologies to determine the right answer to a user’s query, Richard Socher, the company’s chief executive and former Salesforce chief scientist, told Reuters earlier this year.
Socher did not respond to a request for comment for this story.
The market for powerful AI assistants is nascent and competitive, with major companies like Google, Microsoft, ChatGPT creator OpenAI, and now Apple all rolling out new agent-like features for their millions of users.
You.com’s premium consumer subscription service costs $15 per month for an annual subscription and provides access to top AI models from across the industry, as well as other productivity tools. Other subscription services from Google, Microsoft, and OpenAI cost around $20 per month.
A person familiar with You.com’s funding said the company’s sales are rising. The person said the company’s annual recurring revenue has grown fivefold since January, but did not specify the dollar figure. The person said You.com has both consumer and business-to-business subscription revenue.
Venture capital firm Georgian led the round, with funding also coming from You.com’s previous backers, the people said.
Georgia representatives did not respond to requests for comment.
(Reporting by Jeffrey Dastin in San Francisco; Additional reporting by Krystal Hu in New York; Editing by Muralikumar Anantharaman)
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