AI startup Hebbia raises $130 million at a $700 million valuation on profitable revenue of $13 billion


Hebbia, a startup that uses generative AI to search large documents and answer big questions, has raised $130 million in a Series B round led by Andreessen Horowitz at a valuation of around $700 million, with participation from Index Ventures, Google Ventures, and Peter Thiel.

And its funding shows that 50x annual recurring revenue (ARR) is becoming the norm for AI startups, especially those that have generated millions in profitable revenue early in their journey.

The formal funding announcement confirmed most of the details previously reported by TechCrunch, though Hebia continued to raise more funds after our report, amounting to $30 million. But Hebia has not yet made any updated disclosures on this funding round to the SEC, and at this time the latest disclosure still says it is raising about $100 million of new equity.

Hebbia was founded by George Sivulka while he was pursuing a PhD in electrical engineering at Stanford, according to a person familiar with the matter. It had an ARR of $13 million and was profitable when the company was courting investors for the deal.

In an interview with TechCrunch, Sivulka, the startup’s sole founder and CEO, declined to comment on Hebia’s revenue or profitability. But he did say the startup’s revenue has grown 15 times in the past 18 months.

A $700 million valuation means investors valued Hebia at about 54 times ARR. Such eye-popping valuations were common at the peak of the pandemic-fueled boom and are now routinely awarded to buzzworthy AI startups. Hebia’s closest analogue, Glyn and Harvey, was valued at a little over 60 times ARR, according to The Information’s reporting.

Founded in 2020, Hebia initially worked on an AI-powered search and summary tool. The company later rebranded itself as an AI analyst. Matrix, Hebia’s main product, can ingest multiple files of unlimited length, and respond to users’ queries in a tabular format similar to a spreadsheet. For example, Matrix can sift through SEC filings and other documents to organize and compare information about a specific company and its competitors, Sivulka said.

Hebbia currently sells its software primarily to asset managers, investment banks and other financial institutions. But the startup is looking to expand its offering to other sectors, including law firms and pharmaceutical companies, Sivulka said.

According to Sivulka, the company’s product is already being used by 30% of all asset managers who use Hebia for due diligence, asset pricing and other research. The fresh funding is being used to grow its team, continue selling to the financial services industry and expand into other verticals.

Hebbia’s client list includes investment banks Centerview Partners, Charlesbank and law firm Fenwick.

Sivulka has been described as a prodigy. He worked at NASA as a teenager and earned a bachelor’s degree in mathematics from Stanford in 2.5 years.

He also differs from other venture-focused founders in that he has neither direct business experience nor a business-focused co-founder.


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