Mar 23, 2023
Startup Character.AI Raises $150 Million and Becomes a Unicorn
(Bloomberg) -- Startup Character.AI, which lets people create their own chatbots, has raised $150 million in a funding round led by Andreessen Horowitz, notching a $1 billion valuation from investors.
The company’s technology allows users to create chatbots that can assume different personas, from US President Joe Biden to Super Mario. It’s the latest artificial intelligence startup to raise large sums of money, showing investors’ continued interest in the industry only two weeks after the collapse of Silicon Valley Bank up-ended the world of venture-backed startups.
Sarah Wang, a general partner at Andreessen Horowitz, will join the company’s board as part of the deal. Character.AI’s announcement comes the week after another major funding deal for an AI startup, Adept. Adept announced it had raised $350 million from General Catalyst and Spark, as well as SV Angel and A.Capital, which also invested in Character.AI.
Character.AI had initially sought to raise $250 million, Bloomberg reported in January. Noam Shazeer, chief executive officer of the startup, said in an interview that the company has 22 employees, 21 of whom are engineers. The new funding will help grow Character.AI’s team and other types of roles.
Asked whether the startup kept its funds at Silicon Valley Bank, Shazeer said its failure had “no effect on fundraising,” and that “all of our cash is safe.”
Shazeer said Character.AI plans to start experimenting with charging users, perhaps for a premium subscription to its product. “The best way to grow the business is going to be to fund ourselves directly from users, from delivering something of value to a huge number of people,” he said.
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