Powerset Valuation Now At $42.5 Million

By Amit Chowdhry ● Nov 6, 2006

In a mere 33 days since Pulse 2.0 last wrote about Powerset, there has been an introduction of new information regarding the website’s plans to take on Google Inc. head-on and has also now been backed by $12.5 million in Series A of funding. The company had previously raised $30 million as a pre-investment.

The pre-investment came from a long list of angel investors including Reid Hoffman (the founder of LinkedIn), Peter Thiel and Luke Nosek (founders of PayPal), Carl Page (the brother of Google founder, Larry Page), Sean Parker (a founder of Facebook), and Eric Tilenius (founder of Answers.com). The Round 1 investment of $12.5 million was provided by Foundation Capital ($7 million), The Founders Fund ($3 million), and the other $2.5 million was additional investments by the angel investors.

The idea behind their company is that their search engine is based on “natural language,” a component of search that most, if not all search engines lack in quality. An example that VentureBeat provides is that for most search engines if you type in “Who acquired IBM?”, then most other search engines would return the companies that IBM has acquired since these search engines do not understand the difference between subjects and objects. I put it to the test and here is what Google had returned:

For this question, it is expected that Powerset Inc’s search engine would only return results of companies that had acquired certain IBM units such as IBM selling their PC group to Lenovo or AT&T acquiring IBM’s Global Network Business.

For previous coverage of Powerset, click on the category link below or check out the linked VentureBeat article above.