Analysis of Perplexity AI’s Carbon Acquisition

According to a recent report, the AI market is estimated to grow at 37% CAGR from $279 billion in 2024 to $1.8 trillion by 2030. Perplexity AI continues to make its presence felt in the market with the launch of new offerings.

Perplexity’s Financials

Perplexity remains privately held and does not disclose detailed financials. According to recent reports, it was operating at an annualized revenue run rate of $35 million as of August 2024, compared with $5 million in January 2024. A report published earlier this month pegged its annualized revenues at $100 million. Its profitability figures are not known.

Perplexity’s Expanded Offerings

Earlier this year, Perplexity announced the release of its agentic browser Comet. This month Comet was rolled out as a beta version to select users. Perplexity aims to reimagine web browsing through context-aware intelligence provided in Comet. It will personalize responses based on a user’s browsing history and open tabs. Comet will have a side panel accessible across all websites that will leverage Perplexity’s search engine to enabling queries, creation of summaries and discovery of content without switching tabs.

Comet will allow users to ask questions in natural language such as “find that thing I was looking at about sea otters last Tuesday” instead of asking it to search specifically for keywords that describe their search history. But Comet comes in a very crowded market. Google Chrome, Mozilla Firefox, Microsoft Edge, and other niche browsers are all targeting AI-based offerings. Perplexity will need to make sure its browser offers something different to get users hooked onto it.

Perplexity’s Carbon Acquisition

In December 2024, Perplexity acquired Seattle-based Carbon, a retrieval engine that connects external data sources to large language models for an undisclosed sum. Prior to the acquisition, Carbon had raised $1.3 million in a seed funding from investors including Treble and MKT1. Carbon’s technology focuses on providing a seamless integration of various enterprise applications to external data sources.

The acquisition allows Perplexity to offer more personalized and context-aware AI search solutions. By integrating Carbon’s retrieval-augmented generation (RAG) technology, Perplexity is able to provide its users with the ability to search through internal documents and data across platforms like Notion, Google Docs, and Slack. The integration will make it easier to build personalized, more capable knowledge assistants that are suited for the workplace.

Perplexity has raised $915 million in funding so far across seven rounds. Earlier this year, Perplexity was looking to raise another $0.5-$1.0 billion at a valuation of $18 billion. Reports suggest that it is now looking to close a $500 million fund raise at a $14 billion valuation instead. There are currently no formal plans to go public.

Photo Credit: Rupert Kittinger-Sereinig from Pixabay