ElevenLabs Raises $250M at $3B+ Valuation, Led by ICONIQ Growth

ElevenLabs, the New York-based AI startup known for its cutting-edge synthetic voice technology, has closed a $250 million Series C funding round, sources revealed. The round, which values the company at between $3 billion and $3.3 billion, was reportedly led by ICONIQ Growth, with potential participation from Andreessen Horowitz and other previous investors.

This latest valuation represents a tripling of ElevenLabs’ worth since its $80 million Series B just one year ago, when the company reached unicorn status with a $1 billion valuation. While ElevenLabs initially sought a $4 billion valuation, the deal still places the startup among the fastest-growing companies in the generative AI space.

Rapid Growth Amid AI Boom

Founded in 2022 by childhood friends Mati Staniszewski and Piotr Dabkowski, ElevenLabs has risen rapidly in the synthetic voice market. Inspired by the subpar dubbing quality of American films they watched growing up in Poland, the duo developed AI tools to improve voice production. Since the launch of its beta product in January 2023, ElevenLabs has gained a reputation for delivering high-quality voice cloning, dubbing, and editing tools.

The company’s technology supports a variety of use cases, including text-to-speech in multiple languages, voice cloning, changing voices in an audio track, and creating entirely new voices. Customers range from publishers like Washington Post and HarperCollins to text-to-video companies like Syntheisa and numerous gaming firms.

ElevenLabs’ API-based tools have gained widespread adoption across industries, fueling its meteoric rise. By October 2024, the company’s annualized recurring revenue (ARR) had jumped from $25 million in 2023 to $80 million, with some sources estimating it reached $90 million by November.

Addressing Misuse and Building Trust

Despite its success, ElevenLabs has faced controversy, including reports of its technology being used to create fake news. In response, the company implemented robust detection tools and safeguards, positioning itself as a trusted partner for businesses seeking AI-powered voice solutions.

Competitive Landscape

ElevenLabs operates in a highly competitive field, facing challenges from both emerging startups and tech giants like Google and OpenAI. Its valuation multiple of 37 times ARR, while substantial, reflects a tempered market compared to some rivals. By contrast, other generative AI startups have commanded multiples as high as 50 times ARR, particularly those with explosive growth trajectories.

The company’s investors, including Sequoia, Salesforce Ventures, and Disney, have expressed continued confidence in its ability to innovate and expand its market share.

What’s Next for ElevenLabs?

With $250 million in new funding, ElevenLabs is poised to expand its offerings and reach even more industries. The company’s focus on developing advanced voice technology aligns with the broader trend of integrating generative AI into multimedia, gaming, and publishing platforms.

As ElevenLabs continues to grow, its ability to balance innovation with ethical safeguards will be critical in maintaining its leadership position in the rapidly evolving AI landscape.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.