**Hebbia Raises $130 Million in Series B Funding**
Hebbia, a startup that utilizes generative AI to search and respond to large questions within extensive documents, has successfully raised $130 million in Series B funding. The round was led by Andreessen Horowitz, with participation from Index Ventures, Google Ventures, and Peter Thiel. This funding demonstrates the increasing trend of AI startups achieving a valuation of 50 times their annual recurring revenue (ARR), particularly those that have generated significant profitable revenue early on.
**Hebbia’s Impressive Financials and Growth**
According to sources familiar with the matter, Hebbia had an annual recurring revenue of $13 million and was already profitable when pitching to investors. Although the company’s CEO, George Sivulka, declined to comment on revenue specifics, he did reveal that Hebbia’s revenue had grown by 15 times over the past 18 months. These impressive figures undoubtedly contributed to the startup’s ability to secure such substantial funding.
**Valuation and Comparable Startups**
The $130 million Series B funding round has resulted in Hebbia achieving a valuation of approximately $700 million. This implies that investors valued the company at around 54 times its annual recurring revenue. Similar valuations have become increasingly common for AI startups in recent years, particularly during the pandemic-induced boom. Comparable companies like Glean and Harvey had valuations slightly above 60 times their ARR.
**Hebbia’s Evolution and Product Offering**
Originally founded in 2020 as an AI-powered search and summarization tool, Hebbia later transformed itself into an AI analyst. Its main product, Matrix, has the capability to analyze multiple files of unlimited length and respond to user inquiries in a tabular format, resembling 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.
**Expansion into New Industries**
While Hebbia primarily sells its software to asset managers, investment banks, and financial institutions, the company is now expanding its offering to other industries such as law firms and pharmaceutical companies. CEO George Sivulka stated that Hebbia’s software is already being used by 30% of all asset managers for various research purposes. The recent funding will be used to grow the team, continue selling to the financial services industry, and expand into other verticals.
**Hebbia’s Impressive Customer Base**
Hebbia has already attracted a notable list of customers, including investment bank Centerview Partners, Charlesbank, and legal firm Fenwick. This demonstrates the company’s ability to secure partnerships with prestigious organizations within the financial and legal sectors.
**George Sivulka: A Young and Accomplished Founder**
Hebbia’s CEO, George Sivulka, is widely recognized as a wunderkind. He began working at NASA as a teenager and completed his bachelor’s degree in mathematics at Stanford University in just 2.5 years. What sets Sivulka apart from other enterprise-focused founders is his lack of direct business experience and absence of a business-focused co-founder. Despite this, he has successfully led Hebbia to achieve impressive growth and secure significant funding.
In conclusion, Hebbia’s recent $130 million Series B funding round marks a significant milestone for the AI startup. With its innovative AI-powered search and analysis capabilities, expanding customer base, and the leadership of CEO George Sivulka, Hebbia is poised for continued success and growth in the rapidly evolving AI industry.
