Algolia Raises $150M to Scale AI APIs
Search API developer Algolia has closed a $150 million Series D funding round led by Lone Pine Capital. The investment pegged Algolia’s value at $2.25 billion, pushing well into so-called unicorn territory, and accounts for more than half of the $315 million Algolia has raised since it was founded nearly a decade ago.
Algolia’s software augments apps and websites with search-as-a-service features via typing or dictation. The speed and efficiency of the AI powering the search has attracted clients in many industries without AI support. The startup relies on an API-first system to make it as easy as possible for companies to install the tech within their systems and allow it to learn and adapt to what’s needed over time. Though it began and still centers search in its product line, Algolia has been reaching into new markets as well, with APIs for product recommendations and other services on the e-commerce front. The AI is tasked with applying its knowledge of humans to help store owners better understand who their customers are and what, if anything, they might like to buy.
“The future is API-first — a reality underscored by the growth seen by Twilio, Stripe, Algolia, and others in the API economy,” Algolia CEO Bernadette Nixon said in a statement. “A huge part of our success has and will continue to be, our relentless focus on developers with our product-led growth strategy — enabling them to build search into their websites and apps, so they create the most relevant and dynamic digital experiences. And we’re excited to continue to solve customers’ problems as we continue to expand beyond search with Algolia Recommend and Predict.”
Algolia’s ambition reaches across the world, and it has been picking up quite a lot of investor interest as its client list has grown. Though the company raised $110 million in late 2019, Algolia can use the new capital for much bigger projects. There are more than 10,000 companies, including Slack, Medium, and Zendesk, who use Algolia to provide more than 1.5 trillion queries a year, which has led to a 180% rise in yearly revenue for Algolia as they seek to strike while the iron of conversational AI is heating up. The startup regularly unveils new features and ambitions, like the acquisition of a machine learning startup MorphL in January.
“The amazing thing about software is that you can continually iterate on it and Algolia’s API-first approach ensures that companies can build amazing experiences and great digital products and create a cycle of continuous improvement,” Nixon said. “Companies such as Under Armour, NBC Universal, Société Générale, Stripe, and many others are taking this approach and are the ones winning the hearts, minds, and wallets of their customers.”