Hebbia, an innovative AI startup specializing in generative AI for document search and large-scale question responses, has recently secured $130 million in Series B funding, catapulting its valuation to approximately $700 million. This funding round was led by Andreessen Horowitz, with significant participation from Index Ventures, Google Ventures, and Peter Thiel.
Hebbia’s impressive fundraising success highlights the growing trend of AI startups achieving valuations of 50 times their annual recurring revenue (ARR). Despite being relatively young, Hebbia has already generated $13 million in profitable ARR, underscoring its strong market position and potential for further growth.
Founded by George Sivulka during his PhD studies in electrical engineering at Stanford, Hebbia has seen its revenue multiply by 15 times over the past 18 months. This rapid growth, coupled with its profitability, made it an attractive investment. While Sivulka declined to comment on specific revenue or profitability details, the company’s $700 million valuation reflects investor confidence, valuing Hebbia at approximately 54 times its ARR.
Hebbia initially launched with an AI-powered search and summarization tool but has since evolved into a comprehensive AI analyst. The startup’s flagship product, Matrix, can process multiple lengthy documents and respond to user queries in a tabular format, akin to a spreadsheet. This capability allows users to sift through SEC filings and other extensive documents to compare and organize information about companies and their competitors efficiently.
The primary market for Hebbia’s software includes asset managers, investment banks, and financial institutions. However, the company is expanding its reach to other sectors such as law firms and pharmaceutical companies. Currently, about 30% of all asset managers use Hebbia’s tools for tasks like due diligence, asset pricing, and research, according to Sivulka.
The fresh influx of capital is being channeled towards growing Hebbia’s team and continuing its expansion within the financial services industry while also targeting new verticals. The company’s client roster already boasts prestigious names like investment bank Centerview Partners, private equity firm Charlesbank, and law firm Fenwick.
George Sivulka, often described as a wunderkind, has a unique background that sets him apart from other founders. He worked at NASA as a teenager and completed his bachelor’s degree in mathematics from Stanford in just 2.5 years. Unlike many enterprise-focused founders, Sivulka lacks direct business experience and does not have a business-focused co-founder, making Hebbia’s achievements even more remarkable.
Hebbia’s journey from a Stanford dorm room to a leading AI startup with a $700 million valuation exemplifies the transformative potential of generative AI. As the company continues to innovate and expand, it is well-positioned to redefine how industries handle and analyze large volumes of data.
