Someday, you might not know whether a human or an artificial intelligence wrote a sentence like this one. In fact, you might not know for certain right now, since we're already in the early days of AIs that can write with surprisingly human-like flare.
Austin-based startup Jasper AI Inc. is one of the companies on the forefront of using artificial intelligence for content generation for marketing, blogging and a wide variety of other applications.
Its growth has been remarkable.
A little less than two year after its founding, Jasper said Oct. 18 it has raised $125 million in series A funding at a $1.5 billion valuation. That makes it Austin's newest unicorn, and one of the fastest ever to achieve such a rich valuation.
It represents a massive VC injection at a time when venture funding has been falling, in Austin and nationwide. A recent report by PitchBook recorded $701 million raised by local startups across 70 deals. That was down from the $850 million raised across 96 deals in Q2.
The $125 million round is among the largest funding deals for an Austin startup in 2022. In January, Wheel raised a $150 million series C round. In February, Cart.com, which had just moved its headquarters to Austin, announced a $240 million round, which included $98 million in equity funding. Central Texas has a growing list of unicorn companies, which now includes Jasper.
Jasper's new funding round was led by Insight Partners. Other investors included Coatue, Bessemer Venture Partners, IVP, Foundation Capital, Founders Circle Capital and HubSpot Ventures. This brings its total funding to around $130 million.
The startup's rapid ascent came after its founders — Dave Rogenmoser, Chris Hull and John Philip Morgan — worked for years on a previous company and failed to get the traction they needed. The co-founders met in Annapolis, Maryland.
"We were all kind of just in the friend group together," said Rogenmoser, who is CEO. "They were working on one crappy software company. I was working on another crappy software company, just trying to figure out how to be entrepreneurs. And they were just kind of like 'Hey, what if we just built crappy companies together here instead of going out on our own?'"
In 2017, they formed a marketing startup called Proof that helped increase website conversion rates. About a year later, the friends decided to move to Austin, with each of them arriving in their new city within a few weeks of each other.
But Proof had to lay off about half its staff and never gained the traction it needed to take off.
"It just kind of flatlined," Rogenmoser said. "It probably just got stale, and we just couldn't figure out how to grow it."
Jasper was a different story. After diving deep into emerging generative AI technologies, the founders, with their backgrounds in marketing, saw what they thought was a big opportunity and founded their new startup in January 2021.
After developing training models, they had their first iterations of what the product would become.
"When I was doing the early demos with just friends and other marketers, I'd say 'Hey, let me just show this thing to you.' And it was like 'What do you think?'" Rogenmoser said. "And all of them would just be cussing back to me. 'Holy s**t! This is unbelievable.' And it was like this like visceral emotional reaction. I was like, 'OK, this is good.'"
While the company's subscription-based model has been developed with ad writing, blogs and other web content in mind, the platform has been used to write everything from birthday cards to a book created by an 8-year-old boy.
"People are using it for absolutely everything," Rogenmoser said.
While Jasper's AI content is already being widely used, don't expect it to replace human writers anytime soon. Rogenmoser said the AI is great at getting a first draft assembled, the type of work that might help a junior writer. But, he said, people are still at the core of creating content.
"Jasper is an assistant. And I think it's going to be that way for a long long time," he said.
But, he said, generative AI is perhaps the most exciting emerging tech in the world right now.
"I'm sure we're going to look back in a year and just laugh at how terrible Jasper is. This is the worst it'll ever be, and it's pretty good," he said. "But yeah, we're going to see more and more breakthroughs here."
Jasper, which sells subscriptions starting at $40 a month, now has more than 70,000 subscribers. That will likely increase as Jasper adds talent, develops new features and fleshes out its recently launched Chrome browser extension that allows AI to assist writers wherever they may be online.
"We're not sharing the exact numbers, but we just have explosive revenue growth," Rogenmoser said.
That growth has attracted a lot of attention from venture capitalists.
"It’s not often that you see a shift as significant as generative AI, and Jasper is positioned to be a platform to transform the way businesses develop content and convey ideas," Insight Partners co-founder Jeff Horing stated. "The company has built an enormous community around AI in such a short time, and we see new use cases shared every day, including in the enterprise."
Jasper is a remote-first startup with about 150 employees. It considers Austin, where it has about 30 employees and an 11,000-square-foot office, as its headquarters.
The company plans to find a new, larger space downtown or just south of the river in about a year. It also has an office in Salt Lake City. The startup expects to add about 30 more employees by the end of the year, and Rogenmoser said the startup is growing thoughtfully so that it avoids the type of layoffs the founders experienced at their prior startup, Proof.
"That's probably the worst day of my career," he said, recalling the decline of Proof. "I think we were like, 'We don't ever want to do that again.' And so all of last year we were growing explosively. And we didn't hire anybody. We only had like nine people at the end of the year, even though our revenue was way, way bigger than that. And I think we're just like, 'Hey, we just want to go really thoughtful when we do this and do it with strength and not over hire and not get ahead of ourselves.'"
This story has been updated with a correct photo of Jasper co-founders Chris Hull and John Philip Morgan.
