Google Challenger Neeva Ditches Consumer Search, Goes Big Into AI and Enterprise
The Challenger Neeva search engine is no more, at least in its current form, as the Mountain View, Calif.-based company has revealed that it is ending its consumer business.
Founders Sridhar Ramaswamy and Vivek Raghunathan wrote in a blog post yesterday that they faced significant challenges in attracting new users, which combined with the difficult economic environment that all businesses are currently facing means that it is no longer viable to continue on its current path.
“There is no longer a path to building a sustainable business in consumer research,” they wrote. “As a result, over the next few weeks, we will be shutting down neeva.com and our consumer research product, and moving into 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 United States two years agoBefore add one free level to the mix six months later. In the months that followed, Neeva said it amassed over 600,000 users, although the vast majority of them were on a free plan. Seeking growth, Neeva embarked on a rapid global expansion exercise starting with Europe in October, then set about trying to reinvent the entire search experience with a new generative AI engine that combined multiple results and sources to create a single response.
Death to “10 blue links” was the general idea.
Neeva had also been working on a standalone generative AI research app called Gist, and while it was already available on Android, its planned iOS launch in late March was continually delayed with little explanation.
David against Goliath and Goliath
The number of tech layoffs over the past year is a clear indicator of the economic headwinds that even the biggest companies are facing, something Neeva will not have been oblivious to. The company had raised north of $75 million since its inception, including from major backers such as Sequoia and Greylock, but more than two years after its Series B raise, Neeva probably should have thought of a round of series C – something that, in the end, was clearly not to come.
While Neeva’s promise of a real Google alternative was largely based on an ad-free experience and its own search stack, the bottom line is that it was always going to be a Herculean undertaking to knock Google off its lofty perch. It’s something deep-pocketed rival Microsoft has been trying to do lately by injecting a bit of OpenAI’s ChatGPT into its Bing search engine, prompting Google to ramp up its own efforts in the space with Bard. .
So it was obviously a David vs. Goliath & Goliath affair, although Neeva had reinforcements from other challengers such as You.com and Brave. What is clear from all of this is that Neeva simply hasn’t seen the growth that she, or her investors, had hoped for. However, the two founders are adamant that convincing users to pay for ad-free search wasn’t the hardest part – the main challenge was actually getting them to ditch the big names (mainly Google).
“Contrary to popular belief, convincing 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. “Throughout this journey, we’ve discovered that it’s one thing to build a search engine, and an entirely different thing to convince regular users of the need to upgrade to a better choice. From the unnecessary friction needed to change the default search settings, to the challenges of helping people understand the difference between a search engine and a browser, user acquisition has been very difficult.
As part of the shutdown of consumer businesses, Neeva said it would refund paid subscribers and delete all user data. But that doesn’t necessarily mean the end of Neeva. The company previously hinted at some future monetization plans beyond paid subscriptions, including licensing deals to power app search within enterprises — and that could be a path it pursues with more looking forward, now that it is winding down most of its business.
Earlier this week, reports surfaced that Neeva was in talks with cloud giant Snowflake about a potential acquisition, and in light of news that Neeva is turning away from the consumer, such a deal makes a lot of sense. Essentially taking the work he’s already done with large language models (LLMs) and research, and using it in very specific use cases – especially within a company that doesn’t want to s rely on technology provided by Google. or Microsoft, or do not want to start their own internal development from scratch.
But Neeva has yet to confirm any specific plans for the sequel, whether as part of a larger venture or licensing her technology for others to use.
“Over the past year, we have seen a clear and urgent need to use LLMs effectively, inexpensively, safely and responsibly,” the founders concluded. “Many of the techniques we’ve developed with small models, size reduction, latency reduction, and low-cost deployment are what businesses really want and need today. We are actively exploring how we can apply our research and LLM expertise in these contexts, and will provide updates on the future of our work and our team in the coming weeks.