This is how VC A lot of other venture capitalists tried to get the deal, but Nikhil Basu Trivedi beat them all.
There are a lot of young AI startups that venture capitalists are chasing hard these days. GPTZero has already made millions of dollars in its first year and a half of life. GPTZero was started by Edward Tian, 24, and Alex Cui, 26, who have been friends since high school. They give a detection tool that helps people figure out if a piece of content was made by AI.
Team Footwork co-founder Nikhil Basu Trivedi led a $10 million “preemptive” Series A round that the founders decided to take. The team told TechCrunch first. VCs use the word “preemptive” to describe when an investor gets a deal before the founders even try to raise money.
This is a big win for Basu Trivedi. GPTZero has been watched by top venture capital companies since Tian released the first version as a web app in December 2022. 30,000 people downloaded it right away, causing its Streamlit-hosted website to crash. Adrien Treuille, who helped start Streamlit and later sold it to Snowflake for $800 million, is now an angel investor, according to Tian. It became a real business in January 2023.
A lot of VCs called the young founders four or five times a week in 2024, as the company’s customer base grew.
In the last six months, GPTZero’s ARR grew by 500%, the company’s founders told TechCrunch. In the last year, the number of users has grown from 1 million to 4 million. In some ways, this makes it one of the fastest-growing apps for consumers this year.
They also said that the business has been making money for a few months and that they have more cash on hand than they have ever raised. That’s more than $13 million between the $3.5 million that started it all and the new $10 million.
The growth keeps going. Basu Trivedi said that since January, the number of users and sales have “more than doubled, maybe even tripled.” Even though they didn’t say anything about valuation, a normal 20% Series A round puts the deal’s value at around $50 million before the money is paid out. Other investors in the round are Reach Capital, which focuses on education and is run by women; Alt Capital, which is owned by Jack Altman; Uncork Capital, which led GPTZero’s seed round; and Neo, which is Ali Partovi’s fund.
How The VC Made The Deal Happen
This deal went to Basu Trivedi, who is from Princeton and played the long game to get ahead. He met Tian in 2022, before GPTZero went crazy. It was during a yearly trip for a small group of Princeton students to visit companies in Silicon Valley. He always leads the group on a hike of the Stanford Dish.
Tian worked on GPTZero while he was at the Ivy League school studying computer science, writing, and natural language processing. He wrote code that helped writers spot content made by AI while doing internships at the BBC and then at The New York Times.
Tian asked his friend Cui for help after the crazy reaction to his first web app. Cui has a master’s degree in machine learning from the University of Toronto. He put off getting his doctorate to become a co-founder.
They changed the app into the platform it is now and raised $3.5 million in seed money after getting about 1.5 million users in the first five months. Mostly angel investors like Tom Glocer, who used to be CEO of Reuters; Russ Salakhutdinov, who taught at Carnegie Mellon University and was director of AI research at Apple after selling his startup, Perceptual Machines, to Apple in 2016; and Mark Thompson, who is CEO of CNN and used to be CEO of the New York Times.
Basu Trivedi heard that GPTZero was getting a lot of attention from angel investors and saw that the company was getting news. He knew a good company when he saw one because he had backed brands like Canva, ClassDojo, and Frame.io as a seed investor.
In January 2023, he texted Tian to see how things were going. His fast-growth companies, like Canva, and the history of his fund’s co-founder, Mike Smith, who used to be COO of Stitch Fix and Walmart, helped him get the founders’ attention.
The two founders, who are in their 20s, were “craving” investors with experience in both product and operations, Tian said. “Especially since Alex and I are learning how to build a big company.”
To show this, soon after the round was over, Footwork put together a networking event with AI leaders, such as Nvidia founder CEO Jensen Huang and Jack Altman, who is Basu Trivedi’s college roommate and joined the A round and is the brother of OpenAI’s Sam Altman.
“A Benefit Of Big Data”
GPTZero isn’t the only company trying to figure out what material is made by AI. AI Writing Check, Copyleaks, GPT Radar, CatchGPT, and Originality.ai are some others.
But researchers have found that many people who work in the AI detection business are horrifically wrong. So much so that OpenAI had to release its own AI detector at the beginning of 2023 because of fear in the AI industry. However, the tool was shut down in July 2023 after receiving a lot of negative feedback about how badly it worked.
Did his own test with these tools and, interestingly, all of them failed except for GPTZero.
Even though the industry has a bad image, GPTZero has its own standards, especially thanks to a partnership with Penn State researchers, that help it make the case that its technology works well.
Cui says that GPTZero is more accurate because it has more data and has made its own LLM models with the most cutting edge open source tools, but it won’t say what those tools are.
“Our big data gives us an edge.” “We have millions of examples of text that is written by humans and AI,” Cui said. “We’ve also put this together with some of the best models and deep learning.” In fact, we’re using language models to find language models.
The company may be best known for helping teachers spot work that was made by AI (in October, it signed a deal with the American Federation of Teachers), but its customer base has grown. It now has hiring managers, grant-writing groups, government bodies that buy things, and, most interestingly, AI training data labelers.
Tian says that using AI-generated data for AI training “causes model collapse” because teaching a model with made-up examples isn’t the best way to get it to work in the real world.
The young founders have, of course, bigger plans for the future. They want to add a new, separate layer to the internet that will be responsible for making sure that material made by humans and AI is properly credited.
In order to do that, the team is currently working on AI that can spot hallucinations. GenAI is plagued by hallucinations, which happen when the AI shows AI-made fiction as if it were real. A new free AI text copyright check for LLM training samples is the first thing the company is doing to fix this problem. This will help them make the training data that will help them find more hallucinations.
Also Read: Openai Releases the Gpt-4o “omni” Model, Which is Now Running Chatgpt
Tian said, “We’re just trying to stay away from a world where all the content on the internet is made by AI.” “An internet where everyone uses AI limits the chances of people still being able to contribute creative and unique content.”
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