The excitement around artificial intelligence sparked by ChatGPT has led to booming business for a startup with Bay Area roots and ties and helped it raise a new $100 million funding round.
Pinecone Systems Inc.'s database software, which is well-adapted for use with AI models, was plenty popular before OpenAI LLC made ChatGPT available last year, CEO Edo Liberty told the Business Journal. But that event prompted a rush of developers to its service to build new AI applications and spurred many companies to start thinking seriously about how to incorporate AI into their operations, he said.
"We were growing fast last year but that has tripled or quadrupled now," Liberty said.
Founded in 2019 by Liberty, the former director of research at Amazon.com Inc.'s AI lab in Palo Alto, Pinecone offers so-called vector database software. In addition to storing individual bits of data, vector databases also store information about those items in the form of numerical measurements of numerous characteristics. That kind of storage system is becoming popular with machine learning and AI applications, because it can organize and sort through the kind of unstructured data used for such models much more easily than traditional databases.
Pinecone describes its database as a kind of "long-term memory for AI" systems. Its software can be used by companies to house their own data for chatbots or other AI applications, rather than depending on public data or other companies' systems. Among Pinecone's customers are Shopify Inc., HubSpot Inc., Zapier Inc. and Gong.io Ltd., according to the startup.
At launch, Pinecone was based in San Mateo, but Liberty turned it into a fully remote company in the wake of the onset of the Covid-19 pandemic in 2020. Because Liberty is now largely based in New York and the largest concentration of Pinecone's workers is now there also, the company eventually decided to declare the Big Apple as its headquarters.
But while it also has a hub in Tel Aviv, Israel, the startup retains strong ties to the Bay Area. A large portion of its team is in the San Francisco-San Jose region, as is Bob Wiederhold, its president, who is the former CEO Couchbase Inc., the Santa Clara database business. So too is Ram Sriharsha, Pinecone's research chief, who previously was head of engineering at Splunk Inc., the San Francisco data software management business.
Despite its New York base, Pinecone has plans to expand its presence in the Bay Area.
"In recent months, San Francisco has emerged as the undisputed epicenter of all things AI," Liberty said. "That's why we are actively hiring there across all departments and expect that total number to grow considerably."
The company has fewer than 100 employees. But it's doubled that tally every year, Liberty said. It plans to use its new funds in part to double its staff again this year, he said. It also plans to use its new cash, which quadrupled its valuation to $750 million, to grow its business.
Andreessen Horowitz led Pinecone's new round, a Series B. Iconiq Growth, Menlo Ventures and Wing Venture Capital also participated in the deal.
"The rise of AI is driving a fundamental shift in the way companies approach data management," Peter Levine, a partner with Andreessen Horowitz said in a news release Thursday announcing Pinecone's new round. "In a very short amount of time, Pinecone has become a standard and critical component of the modern AI stack."
