Hugging Face Hits $4B Valuation After Salesforce Ventures-Led Round — Report

AI startup Hugging Face is raising an approximately $200 million round led by Salesforce Ventures 1at a whopping $4 billion valuation.

The news was first reported by The Information and seemingly verified by Salesforce CEO Marc Benioff on X.

The New York-based startup allows companies to store and use AI software. It hosts hundreds of thousands of open-source AI models that developers can use for AI applications.

According to the report, the new funding values Hugging Face at more than 100x its annualized revenue.

The new round doubles the startup’s valuation from May 2022, when the company raised a $100 million round at a reported $2 billion valuation.

AI fervor

It was just in March when Salesforce Ventures said it would launch a new $250 million generative AI fund that will look at promising generative AI startups. The firm announced at TrailblazerDX it will initially invest in four AI companies — Anthropic, Cohere, Hearth.AI and you.com.

Three months later, it said it would double its fund size to $500 million, and based on the recent Hugging Face news it plans on deploying that capital.

While most associate Salesforce with sales, the CRM giant has been adding software development tools for years, so the Hugging Face investment seems to make sense.

It also is another sign that the AI fervor that has taken over the private markets is nowhere close to being over. Startups such as Anthropic, AlphaSense, Character.ai and Adept AI have raised massive nine-figure rounds this calendar year at astronomical valuations.

Of course the craze started in January with news of Microsoft’s massive $10 billion investment into OpenAI — creator of ChatGPT.

Just yesterday it was reported that Tiger Global Management was closing in on a deal to sell part of its stake in AI startup Cohere that would value the company at about $3 billion — 36% higher than its valuation after its recent June financing.

Illustration: Dom Guzman