Like a lot of people, I am working to become more fluent with AI this year. This has included working to self-host LLMs, reading the odd research paper, and trying to keep up with the news to ensure that I am up to date on the state of the art.
The Exchange explores startups, markets and money.
Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.
It’s not been nearly enough given the sheer pace at which AI models, and the tools and services that they underpin, are developing. But we must do what we can. So, when Quora announced this morning that it had raised $75 million at a $500 million valuation to support its AI-related work, I was intrigued.
Quora has been around for an age, and I use it occasionally when hunting for a specific, niche bit of information. It turns out, however, that I am quite far behind on what the company has been building lately.
So, what is Quora today? The company’s question-and-answer product still exists and includes a consumer subscription offering. And then there’s Poe, which Quora launched back in early 2023. At the time, TechCrunch reported that the service was going to sit apart from the rest of Quora:
The company explained it decided to launch Poe as a standalone product that’s independent of Quora itself because of how quickly AI developments and changes are now taking place. However, there will be some connections between the Q&A site and Poe. If and when Poe’s content meets a high enough quality standard, it will be distributed on Quora’s site itself, where it has the ability to reach Quora’s 400 million monthly visitors.
Later in 2023, Quora made it possible for users to create their own chatbots using Poe and make money from them. Poe has a paid tier, which costs $20 per month, with discounts for subscribers that pre-pay for a year’s service. If a user’s chatbot helps drive a conversion, they get a cut of the resulting revenue. The rules behind the payouts seem fair enough.
That resulting revenue could be material for the company. By October 2023, the Poe app had been downloaded more than 18 million times and had reached over 1 million monthly active users. That’s a lot!
This brings us to today’s funding news. Quora said that its Q&A business is cash-flow positive and that all the money it raised is going toward Poe:
Our focus is on what we can do with this new capital. As we launch the next phase of our creator monetization program, we expect the majority of this funding will go to developers to help make Poe a single interface for all of the most innovative new AI products. We also look forward to further accelerating our already rapid product development pace, and to creating opportunities where AI can accelerate human expert knowledge sharing through the complementarity of Poe and Quora.
So, because I get paid to tinker with things, I went ahead and used Poe to make a chatbot and test it out. I told AlexWilhelmBot to pretend to be me, and uploaded the text of several articles that I wrote this week. It turns out that the bot was very focused on using only the material that I uploaded, and it only wanted to talk about global venture capital numbers, Jeff Lawson leaving Twilio, and the latest Carta drama. I probably screwed something up; no one is going to pay for AlexWilhelmBot’s musings, sadly.
But I did quite like how easy and inviting it is to build a bot with Poe, and how cool it made me feel. It actually feels empowering to be able to set up a new AI-powered chatbot quickly and then put it to use, and I do not think I’m the only person to feel this way. Indeed, Poe’s success (a16z, which led Quora’s new round, said users have created more than a million bots on the platform) indicates that lots of folks really dig what Quora is building here.
What’s more, you can charge for your AI products. Quora premium costs $84 per year, or $48 if you pay for a year upfront. Poe costs a lot more. That means more revenue from each conversion. Of course, we don’t know how many people pay for Poe, but you don’t simply raise $75 million in 2024 without a decent amount of traction. So, I presume that Quora is seeing a good number of consumer subscriptions for Poe. It’s certainly easier to use than trying to get whatever LLM I snagged from Hugging Face to run my own bot.
Adding it all up: Quora has built a massive engine to bring consumers to its digital realm, it has an AI product in Poe that consumers are using and building on, it’s working with creators to divvy up revenue and keep its offerings fresh, and we know that people are willing to shell out for the category it’s building in. Mix all that together and you’re set to raise a big ol’ venture round.
I just wonder how long Poe will remain as a subsidiary of Quora. It’s not impossible that the tagline may flip to “Quora, brought to you by Poe“ from “Poe, brought to you by Quora.” That may well happen before the end of the year, I wager, provided that consumer interest in generative AI models remains high.
