Generative AI innovator ProRata.ai has raised $40 million in Series B funding while unveiling a novel search tool tailored for publishers. The funding round, led by Touring Capital, positions the company as a key player in reshaping the relationship between artificial intelligence and digital publishing, according to CEO Bill Gross.
Transforming AI and Publishing
ProRata.ai's newly launched product, Gist Answers, empowers publishers to embed AI-driven search functionality directly on their websites. The tool provides summaries and recommendations based on publishers' own content or a broader network of 750 participating organizations. Gross confirmed that Gist Answers is "absolutely free to all the websites, and it's actually profit-making, small profit, but profit-making."
Publishers contributing content to the tool stand to benefit from a 50/50 revenue-sharing model. Popular Science and The Atlantic are among those embracing this new approach, with The Atlantic CEO Nicholas Thompson, who also serves on ProRata.ai's board, stating, "As a publisher, our priority is making sure our journalism reaches audiences in trusted ways."
A New Model for AI and Content Compensation
ProRata.ai positions itself as a neutral platform aimed at addressing a critical issue in the publishing industry - AI models scraping content without compensation. The company advocates for fair attribution and revenue-sharing to reward content creators whose work powers AI applications. Touring Capital general partner Nagraj Kashyap noted, "Generative AI is reshaping search and digital advertising, creating an opportunity for a new category of infrastructure to compensate content creators whose work powers the answers we are relying on a daily basis."
Gross expressed hope that broader adoption of attribution-based models will encourage larger AI firms to follow suit. "My hope is after OpenAI feels the hurt of not having as good quality content, they might talk to us about how can we use our attribution to figure out how to fairly compensate people", he said. "I'm in this for the long game to make that happen."
Strategic Growth and Industry Impacts
The $40 million funding injection, which brings ProRata.ai’s total capital raised to over $70 million, was not driven by immediate financial need. According to Gross, the company still had $20 million remaining from its previous funding round. However, significant interest from Touring Capital and participation from existing investors - including Mayfield Fund, MVP Ventures, and Revolution Ventures - bolstered the opportunity for growth.
ProRata.ai plans to expand its team from 75 employees to around 100, with a focus on technical development, customer service, and sales. Gross explained, "To be able to pay people, we need a salesforce that is out selling. We'll have more ad revenue, which means more revenue to share."
Addressing Industry Challenges
The launch of Gist Answers and the accompanying funding round come at a time when publishers are grappling with the growing tension between content creation and AI-based content use. From lawsuits to licensing agreements, companies are increasingly pushing back against unauthorized use of their work. ProRata.ai’s approach offers a framework for ethical AI integration while ensuring publishers receive due credit and compensation.
By positioning itself as a leader in ethical AI and publisher collaboration, ProRata.ai is paving the way for a more equitable digital ecosystem. As Gross summarized, "Our whole goal is to get this ethical search distributed as far and wide as possible."
