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According to insiders, ElevenLabs has raised a new round at a valuation of $3 billion or more, driven by ICONIQ Growth.

ElevenLabs, a New York startup that develops synthetic voice technology, has raised $250 million in a Series C round, valued between $3 billion and $3.3 billion. The round is being led by ICONIQ Growth and is expected to attract investors interested in AI voice integration into products. ElevenLabs, which has experienced significant growth, initially sought funding at a $4 billion valuation. The company is preparing to announce the round this month.

ElevenLabs, founded in 2022 by Mati Staniszewski and Piotr Dabkowski, has raised $19 million in its Series A funding. The company, founded by childhood friends Mati Staniszewski and Piotr Dabkowski, aims to improve dubbing quality in American videos using AI. The company’s first beta product was released in January 2023, showcasing its potential in the industry.

ElevenLabs, a technology company, has become a key partner for speech-based services for various businesses, including Syntheisa, publishing giants like Washington Post, HarperCollins, Bertelsmann, and gaming companies. The company’s technology, which is usable via an API and priced at various usage tiers, covers various use cases such as translating text to speech, cloning voices, changing voices in audio tracks, and creating new voices. Despite controversy over fake news creation, ElevenLabs has developed detection tools and safeguards to prevent misuse.

ElevenLabs’ annualized recurring revenue (ARR) has increased from $25 million in 2023 to $80 million, with an estimated valuation of $90 million. The deal was done at a slightly more moderate multiple of 37 times ARR. Investors are willing to pay up to 50 times ARR for the fastest-growing generative AI companies. Anysphere, the maker of Cursor, has received multiple unsolicited offers valuing the company at about $2.5 billion, a 52 times ARR valuation.

Anysphere, a startup, has seen its revenue increase from $4 million in April to $4 million a month as of last month. However, by the time the deal was announced, Anysphere had reached $100 million in ARR, implying its valuation was 25 times ARR. ElevenLabs’ more temperate multiple may be due to its competitors, including startups and giants like Google and OpenAI.

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