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ElevenLabs, maker of AI voice tools, sparks widespread VC interest

ElevenLabs, maker of AI voice tools, sparks widespread VC interest

ElevenLabs, a specialist in AI tools for audio, is attracting considerable interest from venture capital investors. This new round of investment could take the AI specialist’s market value to $3 billion.

For this new third round, ElevenLabs is getting a lot of attention from potential investors, sources tell TechCruch. While not every source plans to participate in this round of investment, they do expect it to bring the company’s market value to about $3 billion in the coming weeks.

The sources confirm that the startup’s annual recurring revenue has grown from $25 million at the end of 2023 to about $80 million in recent months. This would make the company one of the fastest-growing startups developing AI voice apps.

The new round would actually triple the proceeds from the earlier Series B round from January this year.

AI audio startup

ElevenLabs is engaged in developing AI-based applications for audio. This is to make content available anywhere, in any language and in any voice.

To do this, it develops AI audio models that, in a safe and responsible way, generate realistic, varied and context-aware speech, voices and sound effects. That feature is available in 32 different languages. The models are customized by the ElevenLabs team to meet the specific needs of everyday users, prosumers and businesses.

Examples of applications where the AI startup’s models generate speech, voices and sound effects include for reading audio books and news stories aloud, using voices of video game characters, aiding in preliminary production for movies, making media local in entertainment applications, dynamic audio content for social media and advertisements and training medical personnel.

The technology can also be used to help people who have lost their voices due to medical reasons or give people more access options for their daily needs.

Minor caveats

Although investors are now placing considerable interest in the company, sources also offer some caveats. Round is based on annual recurring revenue and that is expanding, but it is still less than that of more business-focused competitors Hebbia and Glean.

This is because ElevenLabs’ technology is still primarily used by consumers for commentary and personal video dubbing. However, revenue from consumers is still considered more volatile than revenue coming from wholesale customers. So this makes the annual recurring revenue forecast lower.

ElevenLabs did not respond to the rumors.

Also read: ElevenLabs takes small step toward combating audio deep fakes