Among all the young AI startups being ruthlessly pursued by VCs these days, GPTZero has already grown into profitability in its first year and a half of life, generating millions in revenue. Founded by 24-year-old Edward Tian and 26-year-old Alex Cui, who’ve been friends since high school, GPTZero offers a detection tool that helps identify whether a piece of content was AI generated.
The founders have chosen to take a $ 10 million “preemptive” Series A led by Footwork co-founder Nikhil Basu Trivedi, the team has exclusively told TechCrunch. (“Preemptive” is VC-speak for when an investor nabs a deal before the founders were trying to raise.)
This is quite the coup for Basu Trivedi. GPTZero has been watched by top VC firms practically since Tian launched an initial version as a web app in December 2022, and 30,000 people instantly swarmed it, crashing its Streamlit-hosted website. (Adrien Treuille, Streamlit’s co-founder, who sold to Snowflake for $ 800 million, later became an angel investor, Tian says.) The company formally launched in January 2023.
Throughout 2024 so far, as its customer base has grown, the young founders were fielding four to five calls from VCs per week, they said.
GPTZero grew 500% in ARR in the last six months, the founders told TechCrunch, adding that its user base has grown from 1 million to 4 million in the last 12 months. This makes it one of the fast-growing consumer apps of the year, by some measures.
The company has been profitable for the last several months, they said, adding that they have more money in the bank than the total raised in the lifetime of the company. To put a number to that: more than $ 13 million between its $ 3.5 million seed and the new $ 10 million.
And the growth continues. Users and revenue have “more than doubled, maybe even tripled, since January,” Basu Trivedi said. While they didn’t comment on valuation, based on a typical 20% Series A round, the deal has valued the company somewhere around the $ 50 million mark pre-money. Other investors in the round include education-focused (and women-led) Reach Capital; Jack Altman’s Alt Capital; Uncork Capital (Jeff Clavier’s fund); and Neo (Ali Partovi’s fund).
How the VC won the deal
Basu Trivedi, a Princeton alumni, won the lead on this deal by playing the long game. He met Tian in 2022, before GPTZero craziness, during an annual event where a small group of Princeton students visit Silicon Valley companies. Basu Trivedi always takes the group on a hike of the Stanford Dish.
Tian developed GPTZero while he was studying computer science, natural language processing and journalism at the Ivy League school. During internships for the BBC, and later at The New York Times, he wrote code that helped journalists identify AI-generated content.
After the wild response his initial web app got, Tian reached out to his buddy, Cui, for help. Cui has a master’s in machine learning from the University of Toronto and dropped out of his doctorate program to become a co-founder.
The two rewrote the app into its current stand-alone platform and raised the $ 3.5 million in seed after reaching about 1.5 million users in its first five months. This came mostly from angel investors like Tom Glocer, former CEO of Reuters; Russ Salakhutdinov, Carnegie Mellon University professor and ex-director of AI research at Apple (after he sold his startup, Perceptual Machines, to Apple in 2016); and Mark Thompson, CNN’s CEO and former New York Times CEO.
Basu Trivedi saw how GPTZero was gaining press and impressive angels — and heard the rumblings about it among the VC scuttlebutt. As a seed investor who backed companies like Canva, ClassDojo and Frame.io, he knew a hot company when he saw one.
He texted Tian in January 2023 to check in. He wooed the founders with his network and product know-how from his fast-growth companies like Canva, and with the background of his fund’s co-founder, Mike Smith, former COO of Stitch Fix and Walmart.
Investors with both product and operations experience were what the two 20-something founders were “craving, especially as Alex and I are learning how to build a big company,” Tian said.
To prove the point, shortly after they closed the round, Footwork organized a networking event with AI leaders, including Jack Altman (brother to OpenAI’s Sam Altman, who joined the Seed A round), who was also a college classmate of Basu Trivedi, and Nvidia founder CEO Jensen Huang.
“A big data advantage“
GPTZero is far from the only company working to identify AI-generated content. Others include AI Writing Check, Copyleaks, GPT Radar, CatchGPT and Originality.ai.
But many in the AI-detection industry have abysmal accuracy, researchers find. So much so that OpenAI, which was pressured by AI-industry paranoia into launching its own AI detector at the start of 2023, shut the tool down about seven months later in July, after it was widely criticized for how poorly it worked.
Interestingly, when TechCrunch’s Kyle Wiggers did his own experiment with these tools, all of them flunked except GPTZero.
Naturally, GPTZero has its own benchmarks, particularly through a partnership with Penn State researchers, that help it make its case that its tech works well, despite the industry’s general reputation.
Cui says GPTZero is more accurate because it has access to more data and has built its own LLM models using the most advanced open source tools, which it won’t disclose.
“We have a big data advantage. We have millions of examples of text that is human versus AI,” Cui said. “We’ve also combined this with some of the best-in-class models and deep learning. We’re actually using language models to detect language models.”
While the startup may be best known for helping teachers detect AI-generated student work (in October, GPTZero landed an agreement with the American Federation of Teachers), its customer base has expanded. It now includes government procurement agencies, grant-writing organizations, hiring managers, and — especially interesting — AI training data labelers.
It turns out, using AI-generated data for AI training “causes model collapse,” Tian says, because teaching a model using fabricated examples isn’t the best way to get it to function in the real world.
Naturally, the young founders have a more grandiose long-term vision. They want to create a new, independent layer of the internet that performs accountability, ensuring that human and AI content is properly attributed.
To that end, the team is currently working on AI hallucination detection. Hallucinations, where the AI presents AI-generated fiction as if it were fact, are the bane of the GenAI industry. The company’s first step toward addressing this is a newly available free AI text copyright check for LLM training datasets. This will help them generate the training data for broader hallucination detection.
“We’re just trying to avoid a world where the entire internet is AI-generated content,” Tian said. “An internet where everybody uses AI doesn’t preserve the opportunity for people to continue contributing creative and original content.”
