Hebbia, a startup utilizing generative AI to search extensive documents and answer complex questions, has secured $130 million in a Series B funding round, achieving a valuation of approximately $700 million. The round was led by Andreessen Horowitz, with contributions from Index Ventures, Google Ventures, and Peter Thiel.
This funding highlights a trend where AI startups, particularly those with substantial early profitable revenue, are being valued at 50 times their annual recurring revenue (ARR). The official announcement confirmed details initially, though Hebbia raised an additional $30 million post-report. However, Hebbia has not yet filed an updated disclosure with the SEC, with the latest indicating a $100 million equity raise.
Founded by George Sivulka during his PhD in electrical engineering at Stanford, Hebbia had an ARR of $13 million and was profitable while pitching this deal, according to a source familiar with the matter. In an interview, Sivulka, the sole founder and CEO, declined to discuss Hebbia’s revenue or profitability but noted that the company’s revenue grew 15-fold over the past 18 months.
The $700 million valuation suggests investors valued Hebbia at about 54 times its ARR. Such high valuations, reminiscent of the pandemic-era boom, are now commonly assigned to promising AI startups. Similar companies like Glean and Harvey had valuations slightly exceeding 60 times ARR, according to Information’s reporting.
Founded in 2020, Hebbia initially developed an AI-powered search and summarization tool before transitioning to an AI analyst role. Hebbia’s primary product, Matrix, can process multiple files of unlimited length and respond to user queries in a tabular format, akin to a spreadsheet. For instance, Matrix can analyze SEC filings and other documents to organize and compare information about a specific company and its competitors, Sivulka explained.
