Hebbia, a startup that uses generative AI to search large documents and respond to complex questions, has raised a $130 million Series B at a roughly $700 million valuation. The funding round was led by Andreessen Horowitz, with participation from Index Ventures, Google Ventures, and Peter Thiel.
Funding Milestones and Market Trends
This funding underscores that a 50x annual recurring revenue (ARR) multiple is becoming the norm for AI startups, particularly those generating millions in profitable revenue early on. Although the formal announcement confirmed details previously reported by TechCrunch, Hebbia raised an additional $30 million after the initial report. The startup has not yet updated its SEC disclosure, indicating it was raising around $100 million of new equity.
Company’s Financial Performance
Founded by George Sivulka during his PhD in electrical engineering at Stanford, Hebbia had an ARR of $13 million and was profitable when pitching to investors. Sivulka declined to comment on specific revenue or profitability figures. But mentioned that Hebbia’s revenue grew 15x over the past 18 months.
Valuation and Market Position
The $700 million valuation implies a multiple of about 54 times ARR, which has become routine for promising AI startups. According to reports, Hebbia’s closest analogs, Glean and Harvey, had valuations slightly over 60x ARR.
Product Evolution and Expansion
Initially focusing on an AI-powered search and summarization tool, Hebbia rebranded as an AI analyst. Its main product, Matrix, can ingest multiple files of unlimited length and respond to inquiries in a tabular format, similar to a spreadsheet. For instance, Matrix can sift through SEC filings and other documents to organize and compare information about a company and its competitors.
Target Markets and Customer Base
Hebbia sells its software primarily to asset managers, investment banks, and other financial institutions but is expanding into other areas, including law firms and pharmaceutical companies. According to Sivulka, 30% of all asset managers use Hebbia for due diligence, asset pricing, and other research. The fresh funding will grow the team, continue to target the financial services industry, and expand into other verticals.
Notable Customers and Leadership
Hebbia’s customer list includes investment banks Centerview Partners and Charlesbank and legal firms Fenwick. George Sivulka, described as a wunderkind, worked at NASA as a teenager and graduated from Stanford with a bachelor’s degree in math in 2.5 years. He stands out for not having direct business experience or a business-focused co-founder.
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