British artificial intelligence company ElevenLabs has doubled its valuation to $22bn (about £16bn) after closing a $300m employee share sale, placing it among the most valuable AI labs in the world.
The company announced the deal in a blog post yesterday. The tender offer was led by Wellington and T. Rowe Price, two American investment firms, and values ElevenLabs at twice the $11bn it was worth after its $500m Series D round led by Sequoia Capital in February.
A tender offer allows employees and existing shareholders to sell stock to investors rather than raising fresh cash for the company, City AM reported. ElevenLabs said it was committed to giving staff regular opportunities for liquidity.
Goldman Sachs, EQT, Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan, Sapphire Ventures and BDT & MSD invested in ElevenLabs for the first time, according to the company. Existing investors including Andreessen Horowitz, Lightspeed and ICONIQ also took part. Earlier backers of the company include Sequoia Capital and the actor Matthew McConaughey.
ElevenLabs raised its first funding round in 2022 at a $9m valuation, it said in its announcement of the tender.
ElevenLabs was founded in 2022 by Mati Staniszewski, a former Palantir employee, and Piotr Dabkowski, a former machine learning engineer at Google. It is known for technology that turns text into human-like speech, and its tools can also design sound effects and compose music.
Enterprise customers now account for 55 per cent of its revenue, the company said, as businesses adopt ElevenAgents, its platform for deploying conversational AI agents.
According to ElevenLabs, its agents handle more than 15 million conversations a week, three times the number in February. Tasks include handling refunds, renewing insurance policies, upgrading phone plans and booking healthcare appointments. Annual recurring revenue from ElevenAgents has more than tripled over the same period, the company said.
Customers named by ElevenLabs include Stripe, Deutsche Telekom, the insurer Admiral and the governments of Ukraine and Greece. The company said its technology is used in daily operations at five of the world’s 10 largest tech companies, five of the 10 largest insurers and four of the 10 largest telecoms groups.
It also said its own analysis of customers had found that voice agents resolved issues 31 per cent faster than chat agents on average.
“AI should interact with people the way we interact with each other,” Staniszewski said.
“Getting this right will help ensure AI diffuses widely across the economy, and everyone is able to shape and benefit from it, regardless of technical skill. We’re already seeing rapid adoption of expressive voice agents by enterprises and governments, who are deploying them in service of consumers and citizens. As we grow, it’s important to us to let our people share in some of the value they are creating for our customers and the wider world.”
Emma Norchet of T. Rowe Price said: “As ElevenLabs has grown its conversational agent business, the combination of research, product, and deployment has proved an important structural advantage.”
ElevenLabs, which employs more than 800 people, released two new text-to-speech models, Eleven v4 and v4 Turbo, on Monday.
The new valuation puts ElevenLabs on a par with France’s Mistral, which secured a $24bn valuation in September after what it described as the biggest equity funding round by a privately owned European technology firm. Mistral’s €3bn round, led by Samsung, was announced on 8 September and valued the Paris-based company at more than €21bn.
In the UK, the Hurun UK Unicorn Index valued the country’s nine AI unicorns at more than £40bn combined in July, with ElevenLabs then put at about £8.5bn, City AM reported.
The deal follows a British Business Bank report published on Tuesday which found that UK venture capital funds had matched US returns over two decades, with a pooled multiple of 1.78x for funds from the 2002 to 2021 vintages.
