Exclusive: ElevenLabs has raised a new round at $3B+ valuation led by ICONIQ Growth, sources say
Summary
The company was founded in 2022 by Mati Staniszewski and Piotr Dabkowski, who respectively previously worked at Palantir and Google. As generative AI services have become more advanced, multimedia has come to the fore, and there has been a growing interest in building applications that include sound and video alongside GenAI text services.ElevenLabs released its first beta product in January 2023, and by the time it had raised its Series A of $19 million in June 2023, it had gone viral.Some of that growth has not been without controversy, with stories of fake news being created with its tech. But as ElevenLabs has developed a raft of detection tools and other safeguards to prevent misuse, it has emerged as a key partner for enabling speech-based services for an increasingly high-profile number of businesses.Its technology, usable via an API and priced at a number of usage tiers, covers a wide range of use cases: translating text to speech (in multiple languages), cloning voices, changing voices in an audio track, creating entirely new voices, alongside other voice editing tools.Customers include other technology platforms such as Syntheisa, the text-to-video startup that works with businesses and that announced a fundraise of $180 million earlier this month; publishing giants like Washington Post, HarperCollins, and Bertelsmann, which says 36 businesses are using ElevenLabs tech in their content creation; and gaming companies, among others.Usage has led to a rapid rise in sales. If the latter figure is accurate, a $4 billion valuation would have put its valuation multiple at 44 times ARR; in the end it seems the deal has been done at a slightly more moderate multiple of 37 times ARR.For some context on that number, these are not the most exuberant valuations at the moment: Investors appear willing to pay as much as 50 times ARR for the fastest-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, which translates to about 52 times ARR, TechCrunch reported in November. That implies that the company was valued at 25 times ARR.ElevenLabs more temperate multiple may be a function of the companys competitors, which include a plethora of startups, as well as giants like Google and OpenAI.Other past backers of the company have included Sequoia, Credo Ventures, Concept Ventures, Salesforce Ventures, Disney, and nearly two dozen high-profile angel investors.