Companies looking to incorporate AI voices into their products are rushing to collaborate with Eleven Labs, a startup that develops synthetic voice technologies such as voice clones and dubbing tools. Now, just one year after raising a huge Series B, Eleven Labs is scaling up its business with a huge Series C.
The New York startup closed a $250 million Series C at a valuation of $3 billion to $3.3 billion, multiple sources told TechCrunch. The round is being led by ICONIQ Growth, according to people familiar with the matter. Andreessen Horowitz, one of the lead investors in the company's $80 million Series B in January 2024, was also named as a potential investor in the round. Eleven Labs, ICONIQ Growth and Andreessen Horowitz did not respond to requests for comment.
TechCrunch first reported in October that the company's AI audio technology is being used everywhere, and investors have been scrambling to invest in the company for months after the company experienced massive growth. I went.
Sources said ElevenLab had initially sought funding at a valuation of $4 billion due to the business' strong funnel. However, the $3 billion valuation is still three times the unicorn valuation the company received in its Series B last year. The company is preparing to announce the round this month, one source said, and formal approval could come soon.
ElevenLab's funding comes after several strong years for the company and the industry as a whole. The company was founded in 2022 by Matty Staniszewski and Piotr Dabkowski, who previously worked at Palantir and Google, respectively. Inspired by the poor dubbing of American videos they watched as kids, the two childhood friends from Poland saw an opportunity to use AI to create something better. .
Their idea was a clear example of the right idea and the right time. As generative AI services become more sophisticated, multimedia is on the rise and there is growing interest in building applications that include sound and video along with GenAI text services.
ElevenLab released its first beta product in January 2023, and by the time it raised $19 million in Series A in June 2023, its product was rapidly gaining traction.
Its growth has not been without controversy, including fake news articles created using the technology. However, Eleven Labs has developed a number of detection tools and other safeguards to prevent abuse, and has emerged as a key partner in enabling voice-based services for increasingly high-profile enterprises. .
Its technology is available via API and priced at different usage levels, including text-to-speech translation (multiple languages), voice cloning, changing voices within an audio track, creating entirely new voices, and more. , covering a wide range of use cases. Can be used in conjunction with other audio editing tools.
Customers include other technology platforms such as Syntheisa, a text-to-video startup that works with enterprises and itself announced $180 million in funding earlier this month. Thirty-six publishing giants, including The Washington Post, Harper Collins, and Bertelsmann, say they use ElevenLab's technology to create content. game companies, etc.
Sales increased rapidly due to its use. In October, sources said Eleven Labs' annual recurring revenue (ARR) increased from $25 million to $80 million in 2023. In November, two people estimated that the company's ARR was likely closer to $90 million. If the latter number is accurate, a $4 billion valuation would result in a valuation multiple of 44x ARR. In the end, it appears that the transaction was completed at a somewhat moderate multiple of 37x ARR.
To give some context to these numbers, these aren't the most enthusiastic valuations at the moment. Investors appear willing to pay as much as 50x ARR for fast-growing generative AI companies.
Anysphere, the maker of the popular AI coding assistant Cursor, has received multiple unsolicited offers valuing the company at about $2.5 billion, TechCrunch reported in November. This is approximately 52 times the ARR. The company's revenue has increased from $4 million in annual recurring revenue (ARR) in April to $4 million per month as of last month. (ARR is typically calculated by multiplying the most recent monthly revenue by 12.) But by the time the deal, led by Thrive at a $2.5 billion valuation, was announced earlier this month, Anysphere's ARR had risen to $100 million. It had reached $. The New York Times reported. This means the company is valued at 25x ARR.
Eleven Lab's more moderate multiple may be due to the company's competitors. Competitors include large companies such as Google and OpenAI as well as numerous startups.
The company's past backers include Sequoia, Credo Ventures, Concept Ventures, Salesforce Ventures, Disney, and nearly 20 prominent angel investors.
