You.com Raises $50 Million to Compete in AI Assistant Market

You.com is raising $50 million to get into the market for AI service providers. Many people come and download the app less often, but the company still wants to be worth $700 million to $900 million.

A person with knowledge of the matter said that the company behind You.com is raising an additional $50 million in order to get a position in the growing market for online assistants that use AI.

A source told Reuters that the SuSea  the four-year-old company behind You.com, would be worth between $700 million and $900 million after the Series B funding is almost up. The person said that since the site’s start, 1 billion searches have been done on it.

Some You.com users started to look elsewhere when ChatGPT got people interested in the site’s AI-powered search engine in early 2023. Alphabet’s Google (GOOGL.O) updated its search engine with AI-generated answers for more complex questions, while Microsoft (MSFT.O) updated its Bing search engine with its own AI chatbot.

According to statistics from Similarweb, opens new tab, You.com had 11 million visitors in May, which was more than the 20 million visitors it had at its peak in February 2023. A market intelligence company called Sensor Tower said that the number of app downloads for it has dropped by about 69% so far in 2024 compared to the same time last year. Other AI companies have had the same problems.

In light of this, the Palo Alto, California-based company has changed You.com into an AI assistant that focuses on both search and efficiency. Richard Socher, the company’s CEO and former top scientist at Salesforce (CRM.N), told Reuters earlier this year that You.com could write fiction or computer code and find the right technology for a user’s question.

There are a lot of new and strong AI helpers on the market right now. Google, Microsoft, OpenAI and now Apple (AAPL.O) are some of the big names pushing new agent-like features for their millions of users. Customers who sign up for You.com’s paid subscription, which is billed yearly at $15 per month, can use the best AI models from around the world and other tools to help them get work done. Microsoft, OpenAI, and Google all offer other memberships that cost around $20 a month.

That person who knows about You.com’s funding said that sales are going up. According to the person, the company’s recurring annual income has grown five times since January. Someone said that You.com makes money from both individual and business-to-business subscriptions.