As interest in AI image and text generators grows, Jasper, a startup developing what it calls an “AI content” platform, has raised $125 million at a valuation of $1.5 billion. Surprisingly, this is the company’s first round of funding, and it comes as Jasper is in the process of acquiring AI startup Outwrite, a grammar and style checker with over a million users worldwide.
According to CEO Dave Rogenmoser, the funding will be used to expand Jasper’s core products, improve the customer experience, and bring Jasper’s technology to more apps. It will also support Jasper’s ongoing effort to fold the Outwrite brand under its own, and unify the two companies’ offerings in 2023, led by Insight Partners with participation from Bessemer Venture Partners, IVP, Foundation Capital, Founders Circle Capital, Coatue, and HubSpot Ventures.
“We need the appropriate infrastructure to build a market-leading company in generative AI — that’s what we’ll raise [new] capital for,” Rogenmoser told TechCrunch in an email interview. “We want to build a world-class business, and we need capital and highly strategic partners to do so.”
Rogenmoser founded Jasper in early 2017 with J.P. Morgan and Chris Hull, who largely bootstrapped the company. Rogenmoser is a Y Combinator alum who co-founded Proof, a startup that used algorithms to personalize the websites of businesses. Morgan and Hull, who have backgrounds in B2B marketing and process automation, also helped co-found Proof, whose technology served as the foundation for Jasper.
“I’m a marketer by trade, and I’ve long been interested in AI, seeing how it was becoming more tangible and accessible — moving from theory and academia to a transformative, applied technology that could help people,” Rogenmoser explained. “With the introduction of [OpenAI’s] GPT-3, we saw an opportunity to launch an AI content platform that could assist businesses and professional creators in brainstorming and completing their work more quickly and efficiently.”
Jasper uses artificial intelligence to generate content for blog articles, social media posts, website copy, and other purposes. Customers can use the platform to describe what they want Jasper to write in natural language, whether it’s a keyword-rich piece designed to rank well in search engines or existing content repurposed with additional context.
Copy.ai, WriteSonic, Peppertype, Wordtune, and Simplified are just a few examples of startups that do this. In fact, TechCrunch recently published a thorough survey of the market for AI-powered, copy-generating ad tech vendors. Copysmith raised $10 million in funding for its AI-powered content generation platform in April, while Copy.ai raised $10 million in October.
Jasper’s language models, according to Rogenmoser, set it apart, having been trained on 10% of the web and fine-tuned for “customer specificity.” They power, among other things, Jasper’s Chrome browser extension, which delivers contextual content recommendations across platforms such as Google Docs, Gmail, Notion, and Hubspot.
“The people who will win at generative AI will have the best feedback loops,” he says. “We’re dedicated to creating the best feedback to AI loop possible.”
Jasper Art, a recently launched AI art-generating system, is another differentiator, according to Rogenmoser. Jasper Art, like DALL-E 2, converts prompts into images, allowing users to customize aspects such as medium (e.g., “Canvas,” “Pastel”), art style (“Van Gogh”), and mood.
While there are several free and paid alternatives to Jasper Art (see, for example, Stable Diffusion, Pixelz.ai, and Midjourney), Rogenmoser positions it as an art-generating system specifically designed for marketing applications, such as creating copyright-free stock photos. He claims that Mongoose Media, an early adopter, is using Jasper Art to generate flat lays and backgrounds “at scale” around product images for its designers.
Of course, Jasper Art, like other AI text-to-image systems, has limitations. According to a FAQ on the product page, the system, which includes a content filter to detect “sensitive” or “unsafe” images, such as those depicting violence, may contain biases that cause it to generate images that reinforce negative stereotypes (like CEOs who are mostly white and male).
Customers do not have the exclusive right to use generated images under the terms of Jasper Art’s license. The generations of the system are free for anyone to repurpose and remix, which could be an attempt by Jasper to mitigate future intellectual property and fair use challenges. Systems like Jasper are frequently trained on billions of images from the internet, some of which are copyrighted, prompting image hosts like Getty Images to prohibit AI-generated art for fear of legal wrangling.
Rogenmoser acknowledged that there is “much to be learned” about the boundaries surrounding AI content generation tools and what future regulation might look like.
“The major challenge that the AI generation industry faces is around data ethics and consumer acceptance,” he explained. “While we are constantly in awe of our technology’s power, we are acutely aware of the responsibility it imposes on us.” We are committed to remaining accountable for technology’s power, but we also recognize that our control is limited.”
Marketers appear eager to embrace AI technologies for text and image generation, despite the controversies. According to a Phrasee survey, 63% of marketers would consider investing in AI to generate and optimize ad copy in 2021. Phrasee sells AI-powered copy generation software, so this is an admittedly biased conclusion. However, according to vendor-neutral analytics firm Statista, 87% of current AI adopters are already using or considering using AI for sales forecasting and email marketing.
Jasper has over 70,000 customers and generated $40 million in revenue last year, according to Rogenmoser. The company expects to end 2022 with more than double that revenue — $90 million — thanks to the buzz surrounding AI in adtech and martech.
“We are a hypergrowth company that is also profitable,” Rogenmoser explained. “The pandemic has hastened this business.” As organizations look for ways to improve team efficiency, AI generation is a natural choice to supplement creators and teams.”
“It’s not often that you see a shift as significant as generative AI, and Jasper is positioned to be a platform to transform the way businesses develop content and convey ideas,” said Jeff Horing of Insight Partners in an emailed statement. In such a short time, the company has built an enormous community around AI, and we see new use cases shared every day, including in the enterprise. We are excited to work with the Jasper team as they continue to grow and expand their vision.”