Companies looking to build AI voices into their products are rushing to collaborate with ElevenLabs, a startup that develops synthetic voice technologies such as voice cloning and voice-over tools. Now, ElevenLabs is ramping up business volume with a huge Series C Raise just a year after its massive Series B.
The New York startup has closed a $250 million Series C at a valuation of $3 billion to $3.3 billion, multiple sources tell TechCrunch. The round is being led by Iconiq’s growth, several people said. Andreessen Horowitz, one of the lead investors in the company’s $80 million Series B in January 2024, was another name mentioned as a potential investor in this round. ElevenLabs, Iconiq Growth, and Andreessen Horowitz did not respond to requests for comment.
For months, investors have been rushing to invest in 11 Yen Labs after the company’s blockbuster period of growth, as AI audio technology was used everywhere, TechCrunch first reported in October.
Behind the business’ strong funnel, sources say ElevenLabs was initially seeking funding at a valuation of $4 billion. But the $3 billion valuation still triples the unicorn valuation the company landed in its Series B that year. According to one source, the company is preparing to announce a round this month, so official confirmation could come any time.
ElevenLabs’ funding comes after several big years, both for the company and the broader industry. The company was founded in 2022 by Mazysta Niszewski and Piotr Dabkowski. The pair, childhood friends from Poland, were inspired by the poor quality of dubbing in the American videos they grew up with, and they saw an opportunity to develop something better using AI.
Their idea was a clear example of the right idea, right time. As generative AI services become more sophisticated, multimedia is coming to the fore, with growing interest in building applications that include sound and video alongside Genai text services.
ElevenLabs released its first beta product in January 2023, but by the time it raised its Series A to $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 along with the technology. However, it has developed numerous detection tools and other safeguards to prevent misuse of 11, and has therefore emerged as an important partner in enabling voice-based services for a growing number of businesses. .
Its technology, available via API and priced at many usage tiers, covers a wide range of use cases. Convert text to audio (in multiple languages), close audio, change voices in audio tracks, and create completely new voices. Other audio editing tools.
Customers include other technology platforms such as Syntheisa, a text-to-video startup that works with businesses and announced $180 million in fundraising earlier this month. Publishing giants such as The Washington Post, HarperCollins, and Bertelsmann say 36 companies use ElevenLove’s technology for content creation. game companies, etc.
Its usage has led to a rapid rise in sales. In October, sources said Eleven Love’s annual recurring revenue (ARR; which is generally calculated by multiplying the most recent monthly revenue by 12x) was expected to increase from $25 million to $80 million in 2023. He said that the number had increased. The two in November estimated that ARR was likely closer to $90 million. If the latter number is accurate, the $4 billion valuation would add multiple valuations to the 44x ARR. In the end, it appears to have been done at a rather moderate multiple of 37 Arr.
In some context of that number, these are not the most enthusiastic evaluations at the moment. Investors appear willing to pay as much as 50x for the fastest growing generative AI companies.
Anysphere, the maker of AI-Coding Assistant Cursor, has received multiple unsolicited offers valuing the company at around $2.5 billion. The company has seen its revenue increase from $4 million in April to $4 million in the last month. But by the time the deal, which flourished at a $2.5 billion valuation, was announced earlier this month, Anysphere had reached $100 million in ARR, The New York Times reported. That means the company was valued at 25x Arr.
ElevenLabs’ more benign multiple is likely a function of the company’s competitors, which include giants like Google and Openai as well as a number of startups.
Other past backers of the company include Sequoia, Credo Ventures, Concept Ventures, Salesforce Ventures, Disney, and nearly 20 high-profile angel investors.