Investors Rush to Capitalize on ElevenLabs Ahead of Potential $3 Billion Valuation

ElevenLabs, an innovative startup specializing in AI audio applications, is attracting attention from both existing and new investors for its upcoming funding round, which could potentially elevate the company's valuation to an impressive $3 billion. Founded just two years ago, ElevenLabs focuses on creating AI-driven tools that generate synthetic voices for audiobook narrations and facilitate real-time video dubbing in multiple languages.

An insider from a prospective venture capital firm revealed that interest in ElevenLabs is high, with many investors eager to participate in this rapidly growing venture. This source indicated that their firm is prepared to entertain a valuation of up to $3 billion in order to secure a stake in the next funding round, suggesting a deal may be reached in the coming weeks.

Two additional investors confirmed that while ElevenLabs is indeed seeking to raise funds, they chose to pass on the opportunity. One of these sources relayed that the company's annualized recurring revenue (ARR) has surged from $25 million at the end of last year to approximately $80 million recently, positioning it as one of the fastest-growing startups developing real-world AI applications. (These investors requested anonymity due to competitive sensitivities.)

If this revenue estimate holds true, it implies that ElevenLabs could be valued at about 38 times its latest ARR figure. This multiple is slightly lower than some enterprise-focused companies like Hebbia and Glean. This reduced multiple might stem from the fact that a significant portion of ElevenLabs' revenue is derived from consumer usage, particularly in narration and personal video dubbing, which is generally seen as more variable than revenue from corporate clients.

Should the funding round finalize at a $3 billion valuation, it would mark a threefold increase from ElevenLabs' Series B valuation of January, which was co-led by notable investors like Andreessen Horowitz, Nat Friedman, and Daniel Gross. This would be the third funding round for ElevenLabs in just over a year, although the specifics of the potential investment remain undisclosed as discussions are still in progress. The company has previously secured $100 million in funding.

While competitors such as Google’s Gemini and OpenAI have launched their own human voice models, neither can replicate the speech of individuals to the extent that ElevenLabs can. Other players in the synthetic voice generation market include Murf, Tavus, Resemble AI, Respeecher, and Lovo.

As of now, ElevenLabs has not responded to requests for comment.