ElevenLabs Raises $250M at $3B Valuation for AI Voice

ElevenLabs, the fast-growing startup specializing in synthetic voice technology, has announced a $250 million Series C funding round, bringing its valuation to between $3 billion and $3.3 billion. The round is led by ICONIQ Growth, with Andreessen Horowitz rumored to participate again after leading the company’s $80 million Series B earlier in 2024.

This funding highlights ElevenLabs' rapid rise in the AI voice technology space, fueled by strong business adoption and a surge in demand for generative AI applications.

A Rapid Ascent

Founded in 2022 by childhood friends Mati Staniszewski and Piotr Dabkowski, ElevenLabs emerged from their shared frustration with poor-quality dubbing in American media. Combining AI expertise from Palantir and Google, the duo launched the company at the perfect moment, aligning with the explosive growth of generative AI.

Their debut beta product in January 2023 went viral, paving the way for an impressive Series A raise of $19 million by mid-2023. Since then, ElevenLabs has become a key player in the AI audio landscape.

AI Voice Technology for Diverse Applications

ElevenLabs provides an API-based platform offering a wide range of voice tools, including:

• Text-to-Speech in multiple languages.
• Voice Cloning for creating replicas of real voices.
• Voice Translation for localized content.
• Audio Editing for seamless voice integration.

Their technology is utilized across industries by major publishers like The Washington Post, HarperCollins, and Bertelsmann, gaming companies, and other platforms such as Synthesia, a text-to-video startup. In total, over 36 companies currently leverage ElevenLabs’ tools for content creation and enhanced user experiences.

Explosive Growth

ElevenLabs has seen rapid revenue growth. Its annualized recurring revenue (ARR) jumped from $25 million in 2023 to an estimated $90 million by the end of 2024. While the company initially sought a $4 billion valuation, its final $3 billion valuation reflects a multiple of 37 times ARR—still a strong figure in today’s AI investment arena.

By comparison, similar AI-focused startups, like Anysphere, have seen valuations as high as 50 times ARR. ElevenLabs’ slightly lower multiple reflects the competitive pressure from major players like Google and OpenAI.

Controversies and Safeguards

ElevenLabs’ journey hasn’t been without challenges. Reports of its voice technology being misused for creating fake news drew scrutiny. However, the company has implemented detection tools and safeguards to address ethical concerns, reinforcing its credibility as a trusted partner for businesses integrating voice AI.

What's Next

The $250 million Series C funding will allow ElevenLabs to further scale its operations, enhance its AI capabilities, and expand its reach across industries. With competition heating up and generative AI transforming content creation, ElevenLabs is poised to maintain its leadership in synthetic voice technology.

As investors pour billions into AI startups, ElevenLabs stands out as a company that is not only growing rapidly, but also redefining how businesses use voice technology to engage their audiences. The next phase of its journey promises to be just as groundbreaking.