Investors are scrambling to get into ElevenLabs, which may soon be valued at $3 billion

ElevenLabs, a startup that makes AI tools for audio applications, is being approached by existing and new investors about a new round, which could value the company as highly as $3 billion, TechCrunch has learned. 

The two-year-old company specializes in making AI tools to generate synthetic voices for audiobook narrations, and for real-time video dubbing into other languages.

One source at an interested VC firm told TechCrunch that investors are scrambling to get into the fast-growing company, and that their firm is willing to offer up to a $3 billion valuation, thinking that’s what it might take to get into the next round. This person said a deal is likely in coming weeks.

Investors from two other firms confirmed that ElevenLabs is raising, but are passing on the deal. One of these sources heard secondhand that the company’s annualized recurring revenue (ARR) has grown from $25 million at the end of last year to roughly $80 million in recent months, making it one of the fastest-growing startups developing actual applications for AI. (These investors asked for anonymity for competitive reasons.)

If accurate, that revenue figure means that investors could value ElevenLabs at around 38 times the most recent ARR figure. That multiple is slightly lower than some enterprise-focused companies such as Hebbia and Glean.

The lower multiple may be because a substantial portion of its revenue comes from consumer usage for narration and personal video dubbing. Consumer revenue is often considered more volatile than revenue generated from corporate clients.

The round, if completed at a $3 billion valuation, would triple ElevenLabs’ valuation from its Series B in January, which was co-led by Andreessen Horowitz, Nat Friedman, and Daniel Gross. 

This would be Eleven Labs’ third round in a little over a year, but TechCrunch couldn’t learn the size of the potential investment, as the discussions with investors are still ongoing. Eleven Labs has already raised $100 million.

While Google’s Gemini and OpenAI have introduced their own human voice models, neither company’s offerings can clone the speech of other humans like Eleven Labs. Other companies that are targeting the synthetic voice generation market include Murf, Tavus, Resemble AI, Respeecher and Lovo.

ElevenLabs didn’t respond to a request for comment.