Perplexity Series B

Perplexity raised $73.6M at a $520M valuation in April 2024, which would be adorable if it weren't so fucking cynical. This is a company whose entire business model is "what if we made Google but scraped everyone's content without permission and slapped ChatGPT on top?" They've been caught red-handed lifting content from Forbes, Wired, and countless others—complete with the same errors from source material. The valuation math here is venture capital's version of new math: take OpenAI's wrapper economy, subtract any original technology, add a lawsuit-magnet business model, and somehow arrive at half a billion dollars. IVP and NEA aren't investing in innovation here; they're betting on how long you can run a piracy operation before the lawsuits catch up. It's the Napster playbook without the cultural relevance or the cool factor.

The timing of this deal is particularly grim when you consider that by April 2024, everyone knew the AI wrapper game was cooked. We'd already watched Character.AI implode, Jasper lose its shine, and a dozen other "ChatGPT but for X" companies realize they had no moat and no future. Perplexity jumped into a market that was already playing musical chairs, except the music had stopped and someone had stolen all the chairs to train their model. The company's response to plagiarism accusations? A blog post essentially saying "everyone does it" and "we'll try harder," which is the corporate equivalent of a shrug emoji. Meanwhile, OpenAI launched SearchGPT, Google went all-in on AI Overviews, and suddenly Perplexity's answer-engine shtick looked about as differentiated as a Starbucks in a strip mall.

Let's talk about what $520M buys you in this attention economy: apparently, a company hemorrhaging goodwill faster than it can scrape content. Perplexity's CEO Aravind Srinivas has that classic founder energy of someone who thinks "move fast and break things" applies to copyright law and journalism ethics. The company's defense has been to position themselves as a search engine subject to fair use, which is rich considering they're serving up entire articles rewritten just enough to avoid the plagiarism detector your freshman comp professor uses. This isn't disruption; it's displacement without compensation. The feminist in me can't help but notice how this whole venture-backed permission-less innovation bullshit always seems to extract value from underpaid journalists—disproportionately women and marginalized voices—while funneling money to the same old boys' club. Databricks Ventures jumping in here feels like that friend who shows up to the party right as the cops arrive.

The exit math on this turd is where it gets really entertaining. Who's buying this company? Google and Microsoft have their own implementations. Meta doesn't need it. OpenAI would rather build than buy. Your potential acquirers are either your direct competitors or they're building the exact same thing in-house with actual resources and legal teams. The only scenario where this valuation makes sense is if you believe we're heading toward some kind of "answers cartel" where a handful of AI companies control all information access—which, okay, maybe, but Perplexity won't be one of them. They'll be a cautionary tale in a Columbia Journalism Review article about how venture capital temporarily propped up a content theft operation. The punk rock move here would have been to build something that actually compensated creators, but that would require caring about anything beyond growth metrics and the next funding round.