AI startup Glean lures Citigroup as investor at $2.2 billion valuation after revenue quadruples

Artificial intelligence startup Glean attracted tech companies Databricks and Workday into its latest investment round. The Silicon Valley company also reeled in cash from Wall Street.

Glean, whose software sifts through corporate repositories to provide quick answers to workers' questions, said Tuesday that it's raised $200 million at a $2.2 billion valuation. Banking giant Citigroup joined the lineup of software companies and traditional venture firms Kleiner Perkins, Lightspeed and Sequoia in getting a piece of the fast-growing AI business.

"When people are excited about the potential of a technology relative to other things, people are willing to pay a higher valuation, because they're excited about the market potential," Arvind Purushotham, head of Citi Ventures, told CNBC in an interview. "They think the overall exit will be even larger."

Glean's annualized revenue at the end of January was $39 million, up from $10 million a year earlier. Advancements in AI have allowed the company to augment its product with large language models (LLMs) that can produce natural-sounding text in response to a few words of written input.

The 4-year-old company, which currently has 337 employees, wants to get bigger quickly and could hit 700 staffers by the end of the year, according to co-founder and CEO Arvind Jain.

Many organizations are trying to figure out how much productivity can increase by using generative AI tools such as the Copilot add-on for Microsoft 365 subscriptions. Popularity in the space has surged since OpenAI launched the free ChatGPT chatbot in late 2022, but the business-focused products can be pricey.

Jain declined to talk about the cost of the service. He said it's based on the number of people using the product each month. OpenAI doesn't disclose pricing for ChatGPT's enterprise tier either, but the team version costs $25 per person per month.

Jain, a former Google distinguished engineer and co-founder of data security startup Rubrik, said he sees OpenAI as a partner, because Glean draws on LLMs from OpenAI and other companies to operate an AI assistant to answer questions based on available data. The Copilot for Microsoft 365, which offers a chat tool, is a more direct competitor, Jain said.

At the moment, Jain said he isn't spending a lot of energy trying to increase the amount of revenue the company derives from each individual engaging with the product.

"I'm way more focused on how do we get way more users on the platform," he said.

Clients include Confluent, Databricks and Sony Electronics. A spokesperson said one client has more than 100,000 users, and another is in the midst of deploying Glean to over 100,000 of its employees.

While Glean initially targeted the tech industry, it's now looking to expand in financial services, retail, manufacturing and other sectors, Jain said.

The tech team inside Citigroup's Markets business segment, which offers cross-asset sales and trading to companies and governments, came across Glean as it was looking for the ability to search and summarize data, Purushotham said. The technology is applicable companywide, he added.

Citi hasn't started paying for Glean, but the bank will do a pilot evaluation and might end up as a customer, Purushotham said.

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