ElevenLabs hits $200M ARR and launches $100M tender offer at $6.6B valuation

Great questions. We'd love to have you. Thank you guys. We'll talk to you soon. Text me whenever. Cheers. We will later. Cheers. See you. Uh up next we have 11 Labs coming in the studio. Uh he's in the live stream waiting room, but not for much longer. Let's bring in not from 11 Labs. Welcome to the show. How you doing?

Hey John. Hey Jordy. Thanks for having me on. How do you say your name? Because I almost greeted you with a hoy miy. It's Mati. Although I had the same problem with Jordi. So I was texting people. Is it Horty or is it Jordi? Horty. We're going to Spanish roots there. That is fantastic. Oh yeah. Yeah.

If you went hardcore Spanish, it might be Horti. Horti. Horti. Yeah. Anyway, uh let's jump right into it. Give us the news. What's the latest in your world? The latest is today 11 Labs is launching a tender offer of $100 million where we buy early stage employees and investors at a 6.

6 billion valuation which is double. Thank you guys. This is amazing. This is amazing.

Um so no so happy to to be able to to offer that to all the believers from the early days and uh you know we are building we're are building the company for the generation so I'm hoping to align everybody on that belt for that journey. Okay.

So somebody came to you they wanted to give you 100 million you said I don't need it in the business is like how how did this how did this come about? Um because somewhat non-traditional to for a company to launch potentially hire one more AI scientist for 100 right.

Well, well, yeah, a lot a lot of companies would maybe they'd say like, "Let's raise a couple hundred million and we'll do we'll do uh some some secondary as well, but but what kind of what kind of Yeah. What put you in in the position to just focus on a secondary transaction in this round? " Yeah, two things.

One, we are growing very healthily as a business. We got to 200 million in in in in ARR um over the last weeks and which which has Thank you. Thank you. It has been a a you know kind of a interesting journey where we launched the product. So we started the company in 2022 launched the first product beginning of 2023.

It took us 20 months to get to 100 million in revenue which is at a time super quick. Now there are some some even quicker uh transitions. Then took us 10 months to get to 200 million in revenue which is where we are today. And hopefully we'll get to 300 million by end of the year in 5 months. So 201 10 5 months.

So we are growing very quickly and we are doing that in a healthy healthy uh manner. We have money in the bank to invest in in in GPUs in international expansion. So we don't really need much more capital in the bank.

And then the second piece is um we we had a combination of acquisition attempts over last months uh and and of course um as someone who came back [Laughter] before before 11 Labs. I was at Palunteer. My co-ounder was at Google P and and we had a very different uh setup. Palunteer at the time was private.

It was almost 15 years private.

the the equity wasn't very liquid and um and with pod we want to make it very different now as you think about 11 laps so offer frequent liquidity to employees if we continue running in a healthy manner we are having the capital ready to to deploy we want to make sure that the employees can think about this next 5 10 years so that's where that that early early liquidity is really helpful and you're right we had amazing partners with with SEOA Iconic joining in keing to keen to lead around investment more in the business and and we of course love working with them.

So I wanted to to give them more more more at the table as well. Give us a breakdown of where all the revenue is coming from. Obviously I can think of millions of use cases and I've seen different companies leveraging 11 Labs but but like where are kind of the pockets where most of the growth is coming from? Yeah.

So at 11 Labs we have two key parts of our business. One is a creative platform side of the business and now the second one is our agents platform. U most of people will have known us from that creative side. That's something that has come when we started the company.

That's of course voiceovers for movies, dubbing of movies to other languages, narrations for audiobooks, uh creating music, bringing music into the fault and here uh that's over over now few few million monthly active users that will come through the platform and create incredible content.

And then a second adoption over last over last two years where uh where enterprises like Cisco, Twill, Epic Games bringing bringing the experiences into into Fortnite are are building just incredibly new voice agencies.

And here you can think about call centers, customer support, uh personal agents, media across the business. roughly we are approaching 50/50 between the two. So on one side the self-s serve the creators are are half of the re revenue and then enterprises are the additional half.

Um but that kind of other side is going quicker where we've seen sorry sorry sorry sorry to interrupt. So are you competing with the Sierra Sierras the fins the decagons or or drilling down into that enterprise business?

It's also it sounds like yeah I imagine like game like if somebody's creating like a video game they're they're leveraging voice agents as well. So um but but kind of could you say a little bit more? Of course. So kind of we we on one side we power a lot of the companies.

A lot of the companies you mentioned are our clients. Um makes sense. Decagon maven are are some of the example places we work directly. So a good example is Perplexity who will use voice as part of the interaction to to use Perplexity.

Um another is Epic Games where they've um effectively deployed Darth Vader experience in Fortnite. So every player could interact with Darth Vader live for the first time. One of their biggest deployments. [Music] As a Star Wars fan, I can do nothing nothing less. And and then of course so many across other use cases.

uh chess. com works with us where you can have personalized learning experiences when you play chess and then other companies like Cisco Twilio where they do use it for both internal use case mentioned Jord where we power their work internally but also for their clients.

So today we both we we power a lot of clients across and then also work directly with some of the holistic voice operations. Okay. help me understand a little bit more about where the business fits in. Um I I feel like you've trained actual models. You're a foundation model company in many ways.

Um and then you're also an inference seller. Uh and you and you've you have clients that effectively buy tokens from you. Uh they buy MP3s or wave files probably. Uh but but you're you're doing the inference for them. So, you're kind of full stack in this AI world.

And then also, I just feel like it's been awesome to see you go on this run because uh there were probably a lot of haters. I I feel like I saw some haters being like they're going to get steamrolled by the other labs and you haven't. And you So, what are the sources of defensibility? Uh and and why like Yeah. Yeah.

Why do you just keep Why do the hat Why do the haters keep being wrong? Yeah. I mean it is it is it is uh it's been it's been an amazing amazing run and it's such a unique position that I think was it was contrarian.

It was overlooked early on and people didn't see uh what you saw and so kind of walk me through a little bit of like the structure of the business and and where the defensibility is coming from. Yeah, two answers there.

I think the first piece is um so across 11 Labs we we we started a company with my co-founder Pra is a a an incredible researcher. Yeah. Assemble we think are some of the best researchers in the world in audio. came over.

I wanted to say hi and uh and said that responded that oh I'm a I was an early 11 laps user and still still am but from the day you launched I thought that all the voice uh uh models will commoditize. Uh but one thing I didn't appreciate is that the true voice experience takes an artist and you guys all are artists.

Um and that's uh that is partly true where I think there's so much nuance across voice. Uh you you need to create such a distinct experience when it comes to different voices, different languages, different dialects.

Uh so so Jensen's take that that a lot of a lot of our engineers, a lot of our company is being uh effectively crafting those those artistic experiences is true. Um and yeah, we are we will probably be now Nvidia clients for life too. This is a great take.

Uh it's very similar to why uh we saw that news that Meta has a partnership with Midjourney. Meta has all the money in the world. They have a ton of scientists, but maybe they don't have the artist that is David Holes at Midjourney who just brings taste to those images and so they got to pay him, which I love to see.

Uh, I want your reaction to speaking of that, where are we in the uncanny valley of voice generation? Uh, there was news today in the Wall Street Journal that OpenAI is making a fulllength feature animated film. And in this article, they said the production, they're investing $30 million in this.

It'll be a full uh full featurelength film. They're trying to do it in 9 months, which seems totally doable in the age of AI, honestly. Um but they said the production team plans to cast human actors for character voices and hire artists to draw sketches.

And uh and I saw that and I and I just thought like like I I' I've been under the assumption that voice was solved. Uh even if OpenAI doesn't have the frontier model, you know, if this is a demo of AI broadly, they should be able to figure this out. Why do you think that they're going with human voices here?

And do you think there's there's something that's, you know, on the frontier? Give me your timelines for when we might see uh 11 Labs technology in a Hollywood film.

It's I think first of all I think you you can create an amazing experience already and and and and happily we we we did so maybe maybe there's a uh a a a model or skill help where we can where we can work with open AI and help them help them out on on that side. Um no but they have amazing researchers.

I think I think they are they are going to craft those experiences too. I think that that you know like Epic Games example is a is a great way of of showing that is possible.

In that case, we worked with recreating working with the estate the voice of James Herald Johns and it did sound exactly like Darth Vader and players were like almost amazed that how is it possible where you have dynamically generated script effectively a live NPC in the game for the first for the first time.

Um similarly in our case we worked um we worked with a legends of of the past like Richard FA his voice where you can really immerse yourself in the story but also with with people like Ariana Huffington or first lady Melania Trump on creating their audio books and the whole delivery of that experience is is is is as good as real thing and the crazy thing it also allows you to do things you could never do before.

you can bring those um bring those content pieces into other languages and still hear that voice.

I think Hollywood is is a is a trickier piece where it might take a a slightly longer time aligning um the the likeness component of how you work with the people, how they get compensated and how um and how you bring those experiences on screen.

Uh we do hope that the first dubbed movies will get into production next year where you have even better thing than what was previously possible. you get that original expression available in dubbed movies and in 2027 hopefully the first Hollywood movie hits on the screens in in English too. That'd be very cool.

Thank you so much for joining the stream. Congrats. Congrats to the whole team. Fantastic progress all over the place. Um just uh yeah, remarkable to to see. I love that take about um the artistry that goes into crafting these super differentiated high high tier models. It's uh it's wonderful to see. You love to see it.

Thank you so much. I'm also so proud and happy of our mighty team of of artists uh across in spirits. So, thanks for