Jeffrey Dustin
SAN FRANCISCO (Reuters) – The startup behind You.com is raising $50 million in new funding as it seeks a foothold in the burgeoning market for artificial intelligence assistants, people familiar with the matter said.
The nearly completed Series B funding will value SuSea Inc, the four-year-old company behind You.com, at between $700 million and $900 million, people familiar with the matter told Reuters.
After ChatGPT sparked interest in You.com’s AI-powered search engine in early 2023, some users started looking elsewhere: Microsoft revamped its Bing search engine with an AI chatbot, and Alphabet Inc.’s Google added AI-generated answers to more nuanced queries.
You.com’s 11 million visits in May reflect an increase in web traffic so far this year, but remain below its peak of 20 million in February 2023, according to data from SimilarWeb. The company’s app downloads are estimated to be down 69% year-over-year so far in 2024, according to market research firm Sensor Tower. Other AI startups are facing similar headwinds.
That’s why the Palo Alto, California-based company is transforming You.com into an AI assistant focused on productivity as well as internet search, according to its website.
You.com CEO and former Salesforce chief scientist Richard Socher told Reuters earlier this year that You.com can not only write text and computer code, but also use a vast array of technology to come up with the right answer for users’ questions.
Socher did not respond to a request for comment on the matter.
The market for powerful AI assistants is still nascent and competitive, with Google, Microsoft, ChatGPT developer OpenAI, and now Apple among the big players pushing new agent-like capabilities for millions of users.
You.com offers a premium consumer subscription for $15 per month when billed annually, providing access to the top AI models across industries and other productivity tools. Alternative subscriptions from Google, Microsoft, and OpenAI cost around $20 per month.
A person familiar with You.com’s fundraising said the company’s sales are on the rise. The company’s annual recurring revenue has grown fivefold since January, the person said, without disclosing the amount. You.com has both consumer and business-to-business subscription revenue.
Venture capital firm Georgian is leading the fundraising, with previous U.com backers also contributing money, the people said.
Representatives for Georgia did not respond to requests for comment.
(Reporting by Jeffrey Dustin in San Francisco; Additional reporting by Crystal Hu in New York; Editing by Muralikumar Anantharaman)
