In September 2024, Glean, a six-year-old startup with a goal to build “Google for Work” using generative AI, secured a fresh $260 million in venture capital funding that valued the company at $4.6 billion. For CEO Arvind Jain, who had previously spent 10 years at Google as an engineer, transitioning Glean from a scrappy startup to an AI unicorn with nearly 800 employees has been a challenge.
“We had this constant pressure to scale every single function of our company while not creating chaos. Remember, our existing people have to spend time trying to find the new people, mentoring them, training them,” he told Fortune. “This industry is not allowing anyone to breathe.”
Luckily, he said, Glean’s AI-powered enterprise search products took off and the business has soared. But the company, which Jain said created the enterprise AI search category, now has plenty of competition. “It created this real excitement, and it has brought in companies like Google and OpenAI and Dropbox and Salesforce.”
One lesson Jain’s learned along the way is not to overestimate the impact of rivals. “I feel like people tend to blame the competition because they’re not having success,” he said, adding that most companies fail not because of the competition but because they can’t keep up. “I tell our team, ‘No. 1, think about the problem that we are solving, which in our case, is valuable to every single person that works—work is going to change fundamentally with AI.’”
If Glean has the best product, he explained, and a big opportunity, why should anyone else win? “The answer is, they will [only] win if they execute better,” he said.
Another lesson he’s learned as Glean’s CEO, Jain said, is the importance of changing how he manages the company as it grows. “I’m the one who is actually always doubting myself a little bit,” he said. “The CEOs that are more confident, it’s actually an even bigger problem for them. They need to adapt. They need to change with the times.”
For example, his role has evolved from the early days, when he ordered laptops for his employees, stocked the fridge, and coded for long hours. “I was okay doing it, and people loved it,” he said. “But now, that isn’t going to be an inspiration to anyone. It’s about making sure that we bring the best people into the company and we motivate them to bring the best out of them.”
It was the debut of OpenAI’s ChatGPT two-and-a-half years ago, said Jain, that took Glean from a category-creating startup to a leader in an exploding generative AI category. Enterprise AI search uses LLMs to help find information across hundreds of disparate company tools and applications, rather than requiring employees to hunt for answers in everything from Slack and email to Dropbox and databases. “Before ChatGPT, we were selling a product that nobody had bought before, so we had to do a lot of explaining,” he said.
In terms of its business, Glean has hit $100 million in annual recurring revenue after doubling its customer base over the past year (Jain would not disclose the actual number of customers he was comparing). In a sign of Glean’s relative might, OpenAI CEO Sam Altman in October warned his company’s own investors to avoid plowing money into five companies—Glean among them—because of competitive reasons.
But success, said Jain, has led to another lesson: Making sure to learn from others who are willing to step outside of the box. “Actually, I feel like I learn the most from the youngest people,” he said, because they are the most unencumbered and have different perspectives.
“They’re the ones who have not seen the things that I’ve seen,” he said. “They have new points of view.”
See you tomorrow,
Sharon Goldman
X: @sharongoldman
Email: sharon.goldman@fortune.com
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VENTURE DEALS
- Mercury, a San Francisco-based financial workflow solutions provider, raised $300 million in Series C funding, primary and secondary, at a $3.5 billion post-money valuation. Sequoia Capital led the round and was joined by Spark Capital, Marathon, and existing investors Coatue, CRV, and Andreessen Horowitz.
- AMBOSS, a Berlin-based medical education and clinical decision-making platform, raised €240 million ($258.6 million) in funding. KIRKBI, M&G Investments, and Lightrock led the round and were joined by existing investor Partech and others.
- Island, a Dallas-based enterprise workspace developer, raised $250 million in Series E funding at a valuation of $4.8 billion. Coatue Management led the round and was joined by others.
- Also, a Palo Alto-based small electric vehicles technology developer, raised $105 million in Series B funding from Eclipse.
- Underdog, a Brooklyn-based sports gaming company, raised $70 million in Series C funding from Spark Capital at a $1.2 billion pre-money valuation.
- Straiker, a Sunnyvale-based AI-native security solutions provider, raised $21 million in funding from Lightspeed Ventures and Bain Capital Ventures.
- Brisk Teaching, a San Francisco-based AI-powered teaching assistant, raised $15 million in Series A funding. Bessemer Venture Partners led the round and was joined by existing investors Owl Ventures, South Park Commons, and Springbank Collective.
- Lucky Energy, an Austin-based energy drink company, raised $14.2 million in Series A1 funding. Maveron led the round and was joined by Daily Mail Ventures, Second Sight Ventures, and existing investors Imaginary Ventures, Brand Foundry Ventures, Sapphire Ventures, and Sugar Capital.
- XGS Energy, a Palo Alto and Houston-based geothermal power projects developer, raised $13 million in funding from Aligned Climate Capital, ClearSky, ClimateIC, WovenEarth Ventures, and others.
- Hakimo, a Menlo Park, Calif.-based AI-powered physical security monitoring company, raised $10.5 million in Series A funding. Vertex Ventures and Zigg Capital led the round and were joined by RXR Arden Digital Ventures and existing investors Defy.vc and Gokul Rajaram.
- Pineapple Academy, a Kansas City-based workforce development platform, raised $1 million in funding from HealthStream and KCRise Fund.
PRIVATE EQUITY
- Agellus Capital acquired Orcus Fire & Risk, a Houston-based fire and life safety engineering, consulting, and other services provider for energy and industrial facilities. Financial terms were not disclosed.
- RF Investment Partners acquired Potter’s Potties, a Warrenton, Va.-based portable sanitation services provider. Financial terms were not disclosed.
- Rockbridge Growth Equity acquired a majority stake in Access Global Group, a Southlake, Texas-based Salesforce solutions and services provider. Financial terms were not disclosed.
- SER, backed by TA Associates, acquired AFI Solutions, a Stuttgart, Germany-based digitalization and optimization services provider for SAP document processes. Financial terms were not disclosed.
- TPG agreed to acquire a majority stake in the India and Sri Lanka onshore wind turbine generator manufacturing business of Siemens Gamesa, a Zamudio, Spain-based tk company. MAVCO Investments and Prashant Jain agreed to acquire a minority stake in the business. Financial terms were not disclosed.
EXITS
- Bain Capital agreed to acquire a majority stake in Namirial, a Senigallia, Italy-based business digitization solutions provider, from Ambienta. Financial terms were not disclosed.
- Nonantum Capital Partners acquired MSI Express, a Portage, Ind.-based contract manufacturing and packaging company, from HCI Equity Partners. Financial terms were not disclosed.
OTHER
- Prysmian agreed to acquire Channell, a Rockwall, Texas-based connectivity solutions provider, for $950 million.
- Nue acquired Approvals Pro, an Amsterdam-based approval management solutions provider. Financial terms were not disclosed.
- SE Ventures acquired a minority stake in Regrow Ag, a San Francisco-based agricultural supply chain resilience software platform. Financial terms were not disclosed.
IPOS
- Chagee Holdings, a Shanghai-based teahouse franchisor, filed to go public on the Nasdaq. The company posted $1.7 billion in sales for the year ending Dec. 31, 2024. Junjie Zhang, X Capital Management, Yang Zhou, and Dengfeng Yin back the company.
FUNDS + FUNDS OF FUNDS
- Align Capital Partners, a Dallas-based investment firm, raised $233 million for its first fund focused on independent sponsors.
