Google challenger Neeva gives up consumer search, goes all in on AI and the enterprise

Challenger search engine Neeva no longer exists, at least in its current guise, as the Mountain View, California-based company revealed it is winding down its consumer business.

Founders Sridhar Ramaswamy and Vivek Raghunathan wrote in a blog post yesterday that they were facing significant challenges in attracting new users, which, coupled with the difficult economic climate all companies are currently facing, means that it is no longer viable to operate on the current rate to continue.

“There is no longer a path to creating a sustainable business in the search for consumers,” they wrote. “As a result, in the coming weeks we will be closing and our consumer search product and moving to a new area of ​​focus.”

Founded in 2019 by former Googlers Ramaswamy and Raghunathan, Neeva launched an ad-free, subscription-only (i.e. paid) search engine in the US two years agofor adding one free access to the mix six months later. In the months that followed, Neeva said it had amassed more than 600,000 users, though the vast majority of those were on free plans. Seeking growth, Neeva embarked on a rapid global expansion, starting with Europe in October, then sought to reinvent the entire search experience with a new generative AI engine that combined multiple results and sources to create a single answer.

Death to the “10 blue links” was the general idea.

NeevaAI in action Image credits: MinRegion

Neeva had also been working on a standalone generative AI search app called Gist, and while it was already available on Android, its planned iOS launch at the end of March was continually delayed with little explanation.

David vs. Goliath and Goliath

The number of layoffs in the technology sector over the past year is a clear indication of the severe economic headwinds facing even the largest companies, something Neeva will not have been immune to. The company had raised more than $75 million since its inception, including from major backers like Sequoia and Greylock, but more than two years after the Series B raise, Neeva probably should have thought about a Series C round — something that, came obviously not in the end.

While Neeva’s promise of a true alternative to Google relied largely on an ad-free experience and its own search stack, the bottom line was that knocking Google from its lofty position was always going to be a huge undertaking. This is something its big-bag rival, Microsoft, has been trying to do lately by injecting a little bit of OpenAI’s ChatGPT into its Bing search engine, prompting Google to accelerate its own efforts in the space with Bard.

So this was clearly a David vs. Goliath & Goliath affair, though Neeva did have some support from other challengers like and Brave. What becomes clear from all this is that Neeva simply hadn’t seen the growth that she, or her investors, had hoped for. However, the two founders are convinced that convincing users to pay for an ad-free search wasn’t the hardest part.

“Contrary to popular belief, persuading users to pay for a better experience was actually a less difficult problem than getting them to try a new search engine in the first place,” the founders wrote. “During this journey, we discovered that it is one thing to build a search engine, and quite another to convince ordinary users of the need to move to a better choice. From the unnecessary friction required to change the default search settings to the challenges of helping people understand the difference between a search engine and a browser, it was very difficult to acquire users.”

Enterprise search

As part of the consumer business shutdown, Neeva said it will issue refunds to those with paid subscriptions and delete all user data. But this doesn’t necessarily mean the end for Neeva. The company had previously alluded to some future monetization plans beyond paid subscriptions, including licensing deals to enable application searches within enterprises – and this could be a route it is taking with more haste now that it most of his business is winding down.

Earlier this week, reports surfaced that Neeva was in talks with cloud giant Snowflake about a possible acquisition, and in light of the news that Neeva is switching from the consumer, such a deal makes a lot of sense. Essentially the work it’s already done with large language models (LLMs) and search, and using it in very specific use cases – particularly within an enterprise that doesn’t want to rely on technology from the likes of Google or Microsoft, or start their own in-house development from want to start from zero.

But Neeva hasn’t yet confirmed any specific plans for the future, whether it’s becoming part of a larger company or licensing the technology to others.

“Over the past year, we have seen the clear, urgent need to use LLMs effectively, cheaply, safely and responsibly,” the founders conclude. “Many of the techniques we pioneered with small models, size reduction, latency reduction, and low-cost deployment are the elements that businesses really want and need today. We are actively exploring how to apply our search and LLM expertise in these environments, and will provide updates on the future of our work and team in the coming weeks.”

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