By Jeffrey Dastin
SAN FRANCISCO (Reuters) -The startup behind You.com is raising $50 million in fresh capital, a person familiar with the effort said, as it seeks a foothold in the growing market for assistants with artificial intelligence.
The near-finished Series B funding would value the four-year-old company behind You.com, SuSea Inc, at $700 million to $900 million, the person told Reuters. Users have queried You.com 1 billion times since its launch, the person said.
After ChatGPT ignited interest in You.com's AI-infused search engine in early 2023, some of its users began looking elsewhere. Microsoft (NASDAQ:MSFT) refreshed its Bing search engine with an AI chatbot of its own, while Alphabet (NASDAQ:GOOGL)'s Google added AI-generated answers for more nuanced queries.
You.com's 11 million visitors in May reflected a year-to-date rise in web traffic, but the number was still below its 20 million peak in February 2023, according to Similarweb (NYSE:SMWB) data. Its app downloads have decreased an estimated 69% so far in 2024, versus the same period last year, said Sensor Tower, a market intelligence firm. Other AI startups have faced similar headwinds.
Against this backdrop, the Palo Alto, California-based company has morphed You.com into an AI assistant, one that is focused on productivity as well as internet search, its website shows.
Richard Socher, its CEO and former Salesforce chief scientist, told Reuters earlier this year that You.com could craft prose or computer code, as well as navigate a sea of technologies to determine the right answer to a user's query.
Socher did not respond to a request for comment.
The market for powerful AI assistants is nascent and crowded. Google, Microsoft, ChatGPT's creator OpenAI, and now Apple (NASDAQ:AAPL) are among the big names pushing new agent-like capabilities for their many millions of users.
You.com charges $15 per month for its premium consumer subscription when billed annually, giving access to top AI models from across industry plus other productivity tools. Alternative subscriptions from Google, Microsoft and OpenAI cost about $20 monthly.
The person familiar with You.com's fundraising said its sales are on the rise. Since January, the company's annual recurring revenue has grown five times, the person said, without specifying the figure in dollar terms. You.com has both consumer and business-to-business subscription revenue, the person said.
Venture capital firm Georgian is leading the fundraising, with capital also provided by previous backers of You.com, the person said.
Georgian representatives did not respond to a request for comment.