Hugging Face, the AI startup that serves as a platform provider for machine learning technologies, has raised $235 million in a Series D round at a valuation of $4.5 billion. The investment came from leading technology companies, including, Google, Amazon, Nvidia, Salesforce, AMD, Intel, and Qualcomm. It is apparently the only AI startup with a cap table that features all these big names together.
The reports of Hugging Face’s latest investment rounds have been making rounds for over four weeks now. Forbes had previously reported that the company is raising new funds at a valuation of $4 billion, from Ashton Kutcher’s Sound Ventures, Alphabet’s GV, and Draper Fisher Jurvetson (DFJ). Earlier this week, The Information reported that the company was raising fresh funds at a valuation of over $4 billion in a round led by Salesforce.
The round has more than doubled the valuation of Hugging Face in a little over a year. It had previously raised $100 million at a valuation of $2 billion last year.
The startup had last raised $100 million at a valuation of $2 billion over a year ago. According to the latest report, the firm is expected to raise roughly $200 million as part of this latest round. The startup that had originally started as a chatbot for teenagers and later pivoted to help companies store and use AI software includes Lux Capital, Sequoia, and Coatue, among its previous backers.
With the latest funding, it has now raised close to $400 million to date, making it one of the best funded AI startups in the world.
The Information had reported that the new valuation gives Hugging Face a 100x multiple on its annualized recurring revenue, indicating that the company has an annual run-rate of $43.5 million. The previous report by Forbes had hinted that the annualized revenue of the company was between $30 to $50 million. When Hugging Face raised its last round, it was doing $10 million a year.
The AI startup makes money by charging users a subscription fee – $9 for pro accounts and $20 for enterprises – for using its platform. It also charges money for providing enterprises and individual users hosting services for their models – the pricing of which starts from $0.06 per hour.
Speaking about the latest investment, Clement Delangue, the co-founder and CEO of Hugging Face told different media outlets that the company would use the financing to grow its 170-member team, and invest in more open source AI and platform building.
Explaining why the top companies are investing in Hugging Face, he further added that their employees are using the platform on a regular basis, “AI builders are using Hugging Face all day, every day. Maybe in five years, you’re going to have like 100 million AI builders. And if all of them use Hugging Face all day, every day, we’ll obviously be in a good position.”
The deal makes Hugging Face the fourth highest valued AI startup.
(The story was updated with more details on Aug 25, 2023 at 10 AM GMT).