Among all the new AI startups being ruthlessly pursued by VCs these days, GPTZero has already turned profitable 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 have been friends since high school, GPTZero offers a detection tool that helps determine if a piece of content was created with artificial intelligence.
The founders opted to take a “precautionary” $10 million Series A round led by Footwork co-founder Nikhil Basu Trivedi, the team exclusively told TechCrunch. (“Preemptive” is VC-speak for when an investor closes a deal before the founders try to raise it.)
This is the coup for Basu Trivedi. GPTZero has been followed by top VC firms almost since Tian released an initial version as an online app in December 2022, and 30,000 people immediately flooded it, taking down its Streamlit-hosted website. (Adrien Treuille, co-founder of Streamlit, who sold to Snowflake for $800 million, later became an angel investor, Tian says.) The company officially launched in January 2023.
Throughout 2024 so far, as its customer base has grown, the young founders have fielded four to five calls from VCs a week, they said.
GPTZero has grown 500% in ARR in the past six months, the founders told TechCrunch, adding that its user base has grown from 1 million to 4 million in the past 12 months. This makes it one of the fastest growing consumer apps of the year, by certain measures.
The company has been profitable in recent months, they said, adding that they have more money in the bank than the total raised in the company’s lifetime. To put a number on it: more than $13 million between the $3.5 million and the new $10 million.
And the growth continues. Users and revenue have “more than doubled, maybe tripled, since January,” Basu Trivedi said. While they did not comment on the valuation, based on a typical Series A round of 20%, the deal valued the company at somewhere around $50 million in pre-money. Other investors in the round include education (and women)-focused Reach Capital. Jack Altman’s Alt Capital? Uncork Capital (Jeff Clavier’s fund). and Neo (Ali Partovi fund).
How the VC won the deal
Basu Trivedi, a Princeton graduate, got the lead in this deal by playing the big game. He met Tian in 2022, before the GPTZero craze, during an annual event where a small group of Princeton students visit Silicon Valley companies. Basu Trivedi always leads the team on a trek to the Stanford Dish.
Tian developed GPTZero while studying computer science, natural language processing and journalism at the Ivy League school. While interning for the BBC and later at the New York Times, he wrote code that helped journalists identify AI-generated content.
After the incredible response his initial web app received, Tian reached out to his friend, Cui, for help. Cui has a master’s degree in machine learning from the University of Toronto and left his PhD program to become a co-founder.
The two rewrote the app on its current standalone platform and raised $3.5 million in seed funding after reaching about 1.5 million users in its first five months. This came mainly from angel investors such as Tom Glocer, the former CEO of Reuters. Russ Salakhutdinov, Carnegie Mellon University professor and former director of AI research at Apple (after selling his startup, Perceptual Machines, to Apple in 2016). and Mark Thompson, CEO of CNN and former CEO of The New York Times.
Basu Trivedi saw how GPTZero was winning over press and impressive angels — and heard the buzz about it among the VC boats. As an early investor who backed companies like Canva, ClassDojo and Frame.io, he knew a hot company when he saw one.
Texted Tian in Jan 2023 to check in. He won over founders with his network and product expertise from his fast-growing companies like Canva, and the background of his fund co-founder, Mike Smith, former COO of Stitch Fix and Walmart.
Investors with both product and operational experience were what the two 20-something founders craved, especially as Alex and I learn how to build a large company,” Tian said.
To prove the point, shortly after the round closed, Footwork hosted a networking event with AI leaders, including Jack Altman (brother of OpenAI’s Sam Altman, who joined the Seed A round), who was also college classmate of Basu Trivedi, and Nvidia founder, CEO Jensen Huang.
“A big data advantage“
GPTZero isn’t the only company working on AI-generated content discovery. Others include AI Writing Check, Copyleaks, GPT Radar, CatchGPT, and Originality.ai.
But many in the AI detection industry have abysmal accuracy, find researchers. So much so that OpenAI, pushed by the AI industry’s frenzy to launch its own AI detector in early 2023, shut down the tool about seven months later in July after it was widely criticized for its poor performance.
Interestingly, when TechCrunch’s Kyle Wiggers ran his own experiment with these tools, all but GPTZero failed.
Of course, GPTZero has its own benchmarks, particularly through a partnership with Penn State researchers, that help it argue that its technology 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 she 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 it with some of the best-in-class modeling and deep learning. We’re actually using language models to detect language models.”
While the startup may be best known for helping teachers identify AI-generated student work (in October, GPTZero closed a deal with the American Federation of Educators), its customer base has expanded. It now includes government procurement agencies, grant-writing organizations, hiring managers, and—particularly interesting—AI training data labels.
It turns out that using AI-generated data to train AI “causes the model to break down,” says Tian, because teaching a model using made-up examples isn’t the best way to make it work in the real world.
Of course, the new founders have a grander long-term vision. They want to create a new, independent layer of the Internet that will perform accountability, ensuring that human and AI content is properly attributed.
To that end, the team is currently working on AI hallucination detection. Illusions, where 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 issue is a newly available free AI text copyright checker for LLM training datasets. This will help them create the training data for wider hallucination detection.
“We’re just trying to avoid a world where the entire Internet is AI-generated content,” Tian said. “An Internet where everyone uses artificial intelligence does not preserve the opportunity for people to continue to contribute creative and original content.”
