Exclusive: ProRata.ai raises $40M and launches new search tool for publishers
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Brendan Lynch/Axios
Generative AI startup ProRata.ai has raised $40 million in Series B funding as it prepares to launch a new product for publishers, CEO Bill Gross exclusively tells Axios.
Why it matters: The funding supports a new AI business model where publishers are compensated by AI companies using their work.
Follow the money: Gross says the startup wasn't in need of capital — still having $20 million from its past funding round — but received interest from Touring Capital, which led the round.
- Existing investors Mayfield Fund, MVP Ventures, Revolution Ventures, SBI Investment, BOLD Capital, XPV-Exponential Ventures and Idealab Studio also participated.
- "Generative AI is reshaping search and digital advertising, creating an opportunity for a new category of infrastructure to compensate content creators whose work powers the answers we are relying on a daily basis," Touring Capital general partner Nagraj Kashyap said in a statement.
- ProRata.ai has raised more than $70 million in total.
Zoom in: ProRata.ai's product, Gist Answers, lets publishers embed custom AI search on their websites. Publishers can show AI-powered summaries and recommendations exclusively based off their own content or showcase content from ProRata.ai's broader network of 750 publishers.
- "It's absolutely free to all the websites, and it's actually profit-making, small profit, but profit-making," Gross tells Axios. "Our whole goal is to get this ethical search distributed as far and wide as possible."
- Publishers that choose to license their content to Gist Answers benefit from a 50/50 revenue-sharing model. Adweek tried the experience earlier this year during Cannes Lions. Popular Science and The Atlantic are among the publishers planning to participate.
- "As a publisher, our priority is making sure our journalism reaches audiences in trusted ways," The Atlantic CEO Nicholas Thompson, who is a ProRata.ai board member, said in a statement.
The big picture: Publishers have been forced to address AI models scraping their content without compensation, leading to some lawsuits and a slew of licensing deals.
- ProRata.ai pitches itself as a neutral platform that ensures attribution and revenue-sharing for publishers.
- "My hope is after OpenAI feels the hurt of not having as good quality content, they might talk to us about how can we use our attribution to figure out how to fairly compensate people," Gross says. "I'm in this for the long game to make that happen."
What's next: Gross says ProRata.ai plans to expand its 75-person team to about 100, hiring for its technical team, customer service and sales.
- "To be able to pay people, we need a salesforce that is out selling," Gross says. "We'll have more ad revenue, which means more revenue to share."
