Artificial intelligence startup Simile has raised $200 million in a Series B funding round at a $2 billion valuation, just five months after announcing a $100 million Series A.
The rapid increase in the company’s valuation reflects continued investor enthusiasm around startups developing new ways to use AI for business and consumer research.
Simile’s technology is designed to create what the company describes as synthetic users.
These AI-powered simulations are intended to model how people might think, make decisions and respond to products, marketing campaigns or other experiences.
Businesses could potentially use the technology to test ideas before exposing them to real customers.
The concept could have significant applications in areas such as product development and market research.
Traditionally, companies have relied on surveys, focus groups and real-world testing to understand consumer behaviour.
Those methods can be expensive and time-consuming.
AI simulations could offer companies another way to explore potential outcomes.
A business developing a new product, for example, might use simulated users to test how different groups could respond to pricing, design or marketing decisions.
The approach does not eliminate the need for real human research.
Human behaviour is unpredictable, and a simulated person can only be as useful as the data and assumptions behind the system.
But investors appear to believe synthetic users could become a valuable additional tool.
The latest funding round was led by Greenoaks, with participation from existing investors including Index Ventures, Hanabi, Bain Capital Ventures, A*, Factory and CVS Health Ventures.
CVS is also one of Simile’s customers.
The company was founded by Stanford PhD graduate Joon Sung Park, whose earlier research explored AI agents living simulated social lives.
That work helped inform the technology behind Simile’s current platform.
The startup has ambitious goals.
It wants to develop increasingly sophisticated simulations capable of modelling human behaviour at a large scale.
Whether AI can accurately predict the decisions of real people remains an important question.
Humans are influenced by culture, emotions, unexpected events and countless personal experiences.
A simulation may identify useful patterns without ever perfectly representing how an individual person would behave.
That limitation is likely to remain important as the technology develops.
Still, companies have already shown that they are willing to spend heavily on better ways of understanding customers.
Market research is a major global industry, and even a modest improvement in the speed or quality of decision-making could be valuable.
Simile’s rapid rise also demonstrates how quickly the AI startup market can move.
Five months is an unusually short period between major funding rounds.
The company’s valuation has increased rapidly as investors compete to gain exposure to emerging AI markets.
But rapid valuations can also create pressure.
Investors providing billions of dollars in capital will eventually expect evidence that a company’s technology can develop into a sustainable business.
For Simile, that means proving that synthetic users can become more than an interesting AI demonstration.
The company will need to show that businesses can rely on its technology to make better decisions.
If it succeeds, market research could become another industry significantly reshaped by artificial intelligence.
