GPTZero's Founders Achieve Profitability, Secure $10M Series A, and Dominate the AI Detection Market

Among the numerous young AI startups aggressively pursued by venture capitalists (VCs) today, GPTZero has already achieved profitability in its first year and a half, 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 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, as exclusively reported by TechCrunch. This is a significant coup for Basu Trivedi, as GPTZero has been closely watched by top VC firms since Tian launched the initial version as a web app in December 2022. The company formally launched in January 2023.

GPTZero has experienced rapid growth, with its customer base increasing from 1 million to 4 million in the last 12 months. The company has grown 500% in annual recurring revenue (ARR) in the last six months, making it one of the fastest-growing consumer apps of the year. Additionally, GPTZero has been profitable for several months, with more money in the bank than the total raised in the lifetime of the company, which is over $13 million.

The company's growth continues, with users and revenue having more than doubled, possibly even tripled, since January. Although the founders did not comment on valuation, based on a typical 20% Series A round, the deal has valued the company around $50 million pre-money. Other investors in the round include education-focused Reach Capital, Jack Altman's Alt Capital, Uncork Capital, and Neo (Ali Partovi's fund).

How Basu Trivedi won the deal

Basu Trivedi, a Princeton alumnus, won the lead on this deal by playing the long game. He met Tian in 2022, before GPTZero's popularity, 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 studying computer science, natural language processing, and journalism at Princeton. During internships at the BBC and The New York Times, he wrote code that helped journalists identify AI-generated content. After the initial web app's wild response, Tian reached out to his friend 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 standalone platform and raised $3.5 million in seed funding after reaching about 1.5 million users in its first five months. This came mostly from angel investors like Tom Glocer, Russ Salakhutdinov, and Mark Thompson.

Basu Trivedi saw GPTZero's growing press and impressive angel investors and heard 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 and 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.

GPTZero's accuracy

GPTZero is not the only company working to identify AI-generated content. However, 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. 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."

GPTZero's customer base has expanded to include government procurement agencies, grant-writing organizations, hiring managers, and AI training data labelers. It turns out that 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.

The young founders have a 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."