Initiation Report: Glean Technologies - Disrupting Enterprise Knowledge Management with AI

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Summary Core Thesis

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As businesses embrace cloud and SaaS solutions, managing vast and fragmented data has become increasingly complex, making efficient tools for self-service, onboarding, and information retrieval essential. Glean Technologies, a California-based AI productivity startup, addresses this need by offering employees a Google-like search experience powered by generative AI, enabling quick access to relevant information across enterprise knowledge sources. Glean’s strategic shift toward becoming an AI infrastructure provider, rather than merely an enterprise search tool, significantly expands its influence in the enterprise AI landscape. The company achieved a 450% YoY revenue growth in 2024 on an annualized basis, and a 109% valuation increase in its latest funding round, underpinned by marquee investors like Lightspeed Venture Partners, Citi Ventures, Coatue, and Sequoia Capital. Serving over 200 prominent enterprises, including industry leaders like Duolingo, Grammarly, and Sony, Glean is rapidly emerging as a key player in transforming enterprise knowledge management. Glean was last valued in a Series E round at $4.6B in September 2024. 

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Methodology

Our views on Glean are derived from our rigorous research process, involving proprietary channel checks with users, competitors, and industry experts, and synthesizing publicly available information from the company and other reliable sources. 

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Key Points

Strong Market Traction: Glean AI has demonstrated exceptional market traction, reflected in a robust 300% year-over-year revenue growth as of March 2024. The company powers 1,000+ AI applications across 100+ companies, reinforcing its pivotal role in driving AI adoption at scale. The company is also expanding into high-potential markets such as India, enhancing its global reach. 

Moreover, evolving workplace dynamics are driving Glean’s adoption as employees face challenges accessing information in decentralized environments. The fragmentation of company knowledge due to the rise of SaaS and remote work will also propel the adoption. 

Well-Positioned to Capitalize on Surging AI Spend: With enterprise AI investments surging, Glean is well-placed to seize emerging opportunities as companies increasingly prioritize AI-driven solutions for operational efficiency, cost reduction, and enhanced productivity. The number of US companies investing $10M or more in AI is set to nearly double by 2025, per EY. Further, data from IDC suggests that AI spending in key sectors – software and information services, banking, and retail – is projected to reach $89.6B in 2024 and $222 billion by 2028. Glean’s enterprise search capabilities align with this growth, making it a pivotal player in the AI-driven productivity wave.

Cutting Through the Noise in a Data-Driven World: In an era where 47% of desk workers grapple with information retrieval, per Gartner, and employees lose over two hours daily searching for work-related data, the inefficiencies are staggering. McKinsey estimates AI could cut search times by 35%, leading to a 6% revenue boost. Glean’s AI-powered solutions directly address these inefficiencies and become a critical enabler of productivity and business growth.

Impressive ROI Validates Market Potential: Glean is transforming how businesses extract value from their data, delivering efficiency gains and ROI that empower enterprises to operate at peak productivity. Duolingo saved over 500 hours per month, translating to $1.1M in annual time savings. Super.com saved 1,500+ hours monthly, with a 17x ROI. Webflow saved 300+ hours per month, achieving a 3x ROI. These testimonials are set to drive increased adoption. These proven efficiencies not only drive operational excellence but also create a compelling case for widespread adoption as organizations seek to unlock greater productivity and optimize resource allocation.

Moving Up the Value Chain in AI-Powered Productivity Tools: The company is moving up the value chain, extending its touchpoints and service offerings to customers exemplified by the introduction of next-generation prompting and embedded solutions for Zendesk and Salesforce. There’s an opportunity to further diversify into adjacent areas such as AI-powered workflow automation, predictive analytics, or specialized industry-specific solutions, leveraging its core AI capabilities.

Seamless Integration with Legacy Enterprise Solutions Will Drive Broader Adoption: Glean’s connectors and API integrations seamlessly link with enterprise applications like Google Drive, Salesforce, and Slack, enabling users to search across platforms from a single interface. This reduces app-switching, enhances productivity, and maintains data privacy by respecting security permissions.

Key Risks: Data Security Concerns Could Hinder Adoption and Intensifying Competition Will Demand Constant Innovation: Sharing internal databases with a third-party application could raise data breach concerns amidst the customer base. However, favorable customer testimonials are poised to tackle such issues.

Additionally, established firms could integrate AI into their knowledge management software. Nonetheless, an early-mover advantage coupled with the rapid adoption of AI by enterprises favors Glean.

Valuation: Glean raised $615M across 5 funding rounds, reaching a valuation of $4.6B after a $260M Series E in September 2024 — an impressive 109% surge from the Series D round just seven months earlier. Given Glean’s rapid adoption and proven ability to drive significant operational efficiencies for enterprises, there remains substantial room for further valuation growth as the company continues to scale and capitalize on the expanding AI-driven productivity market.

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Executive Summary

In the digital-first modern workplace environment – characterized by a proliferation of SaaS tools and knowledge databases – the inefficiency of internal knowledge retrieval is a key challenge. This operational friction results in substantial productivity loss, with the average employee spending over two hours daily searching for internal data and resources. Glean AI addresses this challenge by revolutionizing enterprise knowledge management. Glean’s AI-powered engine can sift through vast enterprise datasets, identify patterns, and deliver highly relevant insights. 

Glean’s impact is reflected in its impressive financial performance. The California-based company achieved a 290% YoY revenue growth in 2023, as reported by Sacra, and a 109% valuation increase in its latest funding round, underpinned by marquee investors like Lightspeed Venture Partners, Citi Ventures, Coatue, and Sequoia Capital. Glean serves over 200 enterprises, including industry leaders such as Duolingo, Grammarly, and Sony, and is rapidly expanding its market reach through the Google Cloud Marketplace.

A key differentiator for Glean in the enterprise search space is its customized small-language models tailored to each client, ensuring precise and contextual responses. With continued advancements in next-gen AI solutions, Glean is well-positioned to dominate the enterprise AI landscape and explore adjacent markets, further increasing its total addressable market.

With its innovative AI-powered platform, rapid growth trajectory, and expanding global footprint, Glean is positioned as a leader in transforming enterprise knowledge management. The company’s recent entry into India and the broader APAC region represents a strategic growth opportunity. Backed by a $50M investment and plans to triple its workforce in the region, Glean is poised to capture market share in high-growth economies, diversify its customer base, and drive long-term value for investors.

Company Overview

Glean, a California-based AI-powered enterprise knowledge management platform offers a contextual understanding of enterprise queries in natural language. Glean is a provider of SaaS-based workplace search and knowledge discovery software. 

The company’s core offering is its platform, Glean, designed to index and retrieve information from across a company’s various data sources, allowing employees to find and use the knowledge they need quickly. Glean is developed following modern security principles, including the zero-trust security model. It is Soc 2 Type II Certified, HIPAA compliant, and GDPR compliant. 

Glean offers over 100 prebuilt connectors that integrate with various enterprise systems, including cloud and on-premises environments. As of February 2024, Glean serves 200 enterprise customers, including companies in technology, media, telecommunications, and professional services. Glean is industry agnostic, with higher concentrations in telecom, hospitality, financial services, software, and transportation industries.

Product Suite

Glean Platform: It is a proprietary hybrid search engine capable of indexing a wide array of enterprise data sources. It has advanced features to tailor search results based on a user’s role, relationships, and ongoing projects. It utilizes retrieval-augmented generation (RAG) to ensure generative AI outputs are grounded in up-to-date and accurate enterprise data. It can be deployed as a fully managed SaaS that can be self-hosted or deployed in Glean’s single tenant hosted solution. 

Glean Search: Vector search, powered by deep learning-based LLMs, enables semantic understanding for natural language queries. Glean continuously adapts to their client’s unique language and context, enhancing search relevance without the need for manual fine-tuning. 

Prompt Library: In September 2024, Glean launched next-generation prompting features, allowing users to create multi-step natural language prompts to automate workflows and share them within a company-specific prompt library. This innovation eliminates the need for coding skills or complex automation tools, making AI accessible for everyday tasks. 

Key features include: Advanced Prompts: Automate complex workflows using multi-step RAG for intricate reasoning, all through natural language. 

Prompt Builder: A user-friendly tool for creating, editing, testing, and sharing prompts, enabling collaborative development. 

Glean Assistant: A ChatGPT-powered AI assistant that provides real-time answers and recommendations by leveraging the Glean knowledge graph. It is used for various tasks like debugging code, customer support, sales communication, and employee onboarding. Generative AI supports personalized responses, leveraging company data and AI models to provide contextually accurate answers. 

Glean Apps and APIs: Glean apps are no-code tools for creating custom AI agents, assistants, and chatbots. Glean APIs enable the development of custom AI applications grounded in company data. Supports integration into various enterprise applications and systems. 

Knowledge Management: The knowledge graph connects all enterprise data, including content, people, and organizational interactions. It also allows users to organize and share information efficiently through collections, such as Go Links, which help navigate to common resources. 

Competitive Benchmarking

Glean differentiates itself from competitors with its strong compatibility with different application software of the client, a focus on serving technology companies, and a core focus on AI-powered internal enterprise knowledge management and search. Glean is also the most well-funded startup in the AI-powered knowledge management space, underscoring investor confidence. It is also the most highly valued startup in its niche. 

Glean - Strong Competitive Position

Glean operates in the enterprise search and knowledge management markets. While competition is strong, the knowledge management market presents significant opportunities for all players. In the case of the emerging niche of AI-powered enterprise search, Glean holds the pole position, resulting in moderate competitive rivalry. AI startups are attracting significant private funding, facilitating entry for new competitors. Large public companies can also strengthen their offerings with AI-driven enterprise search solutions, increasing the threat of new entrants. There are numerous knowledge management software providers, but Glean’s focus on tech startups and seamless integration with existing enterprise application software reduces customer bargaining power. With many vendors available to fulfill the requirements of a knowledge management solutions provider, supplier bargaining power is low. As the most well-funded startup in AI-powered enterprise search, Glean’s capability for smooth integration also minimizes the threat of substitutes. These factors collectively position Glean as a highly promising investment opportunity. 

Key Positives:

Strong Market Traction

Glean AI has demonstrated exceptional market traction, reflected in its staggering 450% year-over-year revenue growth (as of August 2024). The company’s subscription revenue has surged to $55 million on an annualized basis, with projections indicating it could surpass $100 million by year-end. This explosive growth underscores Glean’s ability to scale rapidly, driven by strong demand for its AI-powered enterprise solutions. 

The company supports over 1,000 AI applications across more than 100 organizations, underscoring its critical role in facilitating large-scale AI adoption. Glean has successfully expanded its customer base to include major enterprises such as Reddit, Instacart, Pinterest, Duolingo, and Databricks, among others. Additionally, in 2024, Glean launched embedded solutions for Zendesk and Salesforce Service Cloud, further enhancing its market presence.

Glean’s has an impressive average DAU/MAU ratio of approximately 40%, significantly outpacing the typical 10-20% seen in standard enterprise SaaS solutions. This level of engagement underscores Glean’s effectiveness and relevance in the market.

Foray into the Indian market will also ensure rapid revenue growth. The Asia-Pacific knowledge management software market is projected to experience the highest CAGR from 2022 to 2030, driven by robust economic growth and increased demand for information solutions, per Market Research Future. Moreover, within Asia-Pacific, India was the fastest-growing country in this space. In July 2024, Glean entered this high-growth region through capacity expansion, opening its office in Bengaluru, with plans to triple local headcount to 450.

Glean boasts an impressive customer retention rate of 62.5%, per Vendr, highlighting exceptional customer satisfaction and robust product performance. This high retention is further validated by positive feedback across platforms such as G2, Gartner, AWS Marketplace, Trust Radius, and Outmind. Users consistently emphasize the platform’s seamless deployment, productivity improvements, and advanced search functionalities. These endorsements not only demonstrate strong user loyalty but also contribute to a stable revenue stream from existing clients.

On a global scale, Eighty percent of organizations report already using multiple AI models, per Salesforce. Additionally, the average number of AI models used by IT organizations is estimated to increase by 69% within the next three years. Moreover, AI is viewed as a solution to growing backlogs if used correctly: 85% of leaders say the application of AI has increased developers’ productivity in their organization, per Salesforce. Glean is well-equipped to capitalize on the growing acceptance and adoption of generative AI. 

Well-Positioned to Capitalize on Surging AI Spend

As enterprise AI investments accelerate, Glean is strategically positioned to capitalize on the burgeoning demand for AI-driven solutions aimed at operational efficiency, cost reduction, and heightened productivity. The number of US companies investing $10 million or more in AI is expected to nearly double by 2025, per EY. Furthermore, IDC forecasts that AI expenditures in key sectors—including software and information services, banking, and retail—will grow from $89.6 billion in 2024 to $222 billion by 2028. Glean’s advanced enterprise search capabilities are well-aligned with this upward trajectory, positioning the company as a critical player in the AI-driven productivity revolution. 

Senior leaders whose organizations allocate 5% or more of their total budgets to AI investments are experiencing significantly higher positive returns across various metrics compared to those investing less than 5%. Specifically, they report improved employee productivity, enhanced cybersecurity, greater product innovation, and stronger competitive advantages. 

This favorable impact is fueling a robust investment cycle in AI. Notably, 51% of senior leaders at organizations currently investing in AI acknowledge that just three years ago, their AI expenditures were below 5% of their total budgets. As of July 2024, 50% of these leaders plan to allocate 25% or more of their budgets to AI investments in the coming year. 

Glean is currently adopted by companies across various sectors, including telecommunications, banking, retail, travel, social networking, manufacturing, semiconductors, and electronics. The top three industries for artificial intelligence spending—software and information services, banking, and retail—are all key targets for Glean. 

The software and information services industry is swiftly adopting artificial intelligence to revolutionize service delivery, with IDC projecting spending to reach $33 billion in 2024. Glean has achieved a strong product-market fit in this sector, evidenced by 70% active usage among employees at Confluent, an enterprise SaaS company, resulting in a substantial time savings of approximately 15,000 hours per month. Given such demonstrable benefits and the increasing adoption of AI within the industry, Glean is well-positioned for rapid customer expansion in the software and information services industry. 

The banking sector is set to invest around $31.3 billion in AI by 2024, per IDC, creating a robust opportunity for Glean to accelerate revenue growth. Glean has successfully showcased tangible benefits for clients in the finance domain, as demonstrated by a 98% adoption rate at Wealthsimple, a fintech company, which has achieved approximately $1 million in annual time savings through Glean. With these clear benefits for fintech organizations and the rising adoption of AI in banking, Glean is well-equipped for new business opportunities in this space. 

Cutting Through the Noise in a Data-Driven World

In today’s digital landscape, enterprises are increasingly burdened by the fragmentation of information across a multitude of software applications. With the average enterprise relying on over 1,000 applications, only 29% of which actively share data, the resulting silos lead to significant inefficiencies and productivity losses. 

This challenge is further compounded by the rise of remote work, making it even more difficult for employees to access the information they need. 47% of desk workers struggle to find necessary data, per Gartner and employed Americans spend 2+ hours daily searching for work-related information. This inefficiency carries substantial financial implications, with lost productivity potentially costing Fortune 500 companies over $12 billion annually. On average, workers spend 20% of their workweek trying to locate and understand the documents, information, or colleagues they need to perform their jobs. 

The shift to distributed work environments has made it crucial for companies to provide employees with efficient tools for self-service, onboarding, and information retrieval. However, legacy enterprise search platforms have struggled to address these challenges due to poor connectivity, subpar search results, and misaligned technological investments. 

With the latest advances in machine learning, it’s possible to provide high-quality, personalized search results from across an entire company’s software environment. Progress in AI, particularly in natural language processing, has led to improved search functionality that can significantly enhance employee collaboration and information sharing. McKinsey suggests that AI can reduce search time by 35%, potentially boosting productivity and increasing revenue by up to 6%. 

Glean AI addresses these challenges by unifying and contextualizing enterprise data through advanced indexing, semantic search, and personalization technologies. By integrating over 100 APIs, Glean provides a personalized, Google-like search experience that not only retrieves information but also understands the context, roles, and relationships within the organization. This results in permission-aware answers that are highly relevant, reducing the time employees spend searching for information and improving overall job satisfaction. The average Glean user makes 20 searches per day and saves 2-3 hours per week. 

As remote work becomes more prevalent, the challenge of managing fragmented information has only intensified. The average worker in the US now uses 11 different applications daily, and the inability of these tools to effectively communicate with one another exacerbates the problem. 

Glean’s approach not only streamlines access to information but also ensures that employees can quickly find what they need, enhancing job satisfaction. By addressing the inefficiencies caused by data silos, Glean is filling a crucial gap in the enterprise technology landscape, ultimately driving better business outcomes and reducing the financial impact of lost productivity. 

Impressive ROI Validates Market Potential

Glean AI’s impact is evident in its customer success stories. Duolingo reported saving over 500 hours per month, translating to $1.1 million in annual time savings. Super.com achieved a 17x ROI by saving more than 1,500 hours monthly, while Webflow saved 300+ hours per month, realizing a 3x ROI. These tangible benefits underscore Glean AI’s value proposition and will likely drive broader adoption across industries. 

Moving Up the Value Chain in AI-Powered Productivity Tools

AI has introduced increased complexity to integration strategies among various industries. Organizations currently utilize an average of 991 applications across their digital ecosystem, with a typical lifespan of just four years, per Salesforce. Glean is strategically positioned to streamline this overwhelming app landscape for employees. Moreover, the company is moving up the value chain, extending its touchpoints and service offerings to customers exemplified by the introduction of next-generation prompting and embedded solutions for Zendesk and Salesforce. There’s an opportunity to further diversify into adjacent areas such as AI-powered workflow automation, predictive analytics, or specialized industry-specific solutions, leveraging its core AI capabilities.

Glean is well-positioned to penetrate these large and growing markets. Glean is strategically positioned to enter large and expanding markets. The company plans to enhance its generative AI capabilities, both through built-in features and platform tools that enable clients to develop their own applications. With over 100 connectors, Glean creates a unique knowledge graph for each customer, evaluating direct connections along with numerous other signals and relationships. This allows Glean to deliver advanced hybrid search and generative AI that continuously learns and improves, evident in daily searches and queries. These ongoing technological advancements enable Glean to diversify its offerings across tech-driven operations of various industries, establishing itself as a leading AI-powered SaaS provider.

Evolving Workplace Dynamics to Propel Adoption

Evolving Workplace Dynamics to Propel Adoption

Employees struggle to access necessary information as workplaces become more decentralized and distributed. The SaaS explosion and remote work have fragmented company knowledge, reducing information visibility and employee connection. 

Remote and Hybrid Work is Here to Stay: Upwork projects that 22% of the American workforce will be remote by 2025. This equates to 36.2 million remote workers, up by 16.8 million from pre-pandemic levels.

Office attendance is still about 30% below pre-pandemic levels, according to McKinsey & Company. This decline is particularly pronounced in metropolitan areas such as London, New York, and San Francisco, where a high proportion of knowledge-economy workers and costly housing contribute to reduced office presence. When employees do return to the office in these markets, it is primarily to collaborate with their teams.

The SaaS Sprawl

The average desk worker used 11 applications in 2022, nearly double the six apps used in 2019, with 40% using even more, and 5% managing over 26. Despite this, 66% of respondents in a Gartner survey believe better business outcomes could be achieved if IT provided standardized and widely supported tools. The over-reliance on multiple apps creates challenges, as workers struggle to find information, miss important updates, and face decision-making issues due to irrelevant notifications and information overload

Everyday AI and Digital Employee Experience: Transformative Innovations on the Horizon

Everyday AI and digital employee experience are set to reach mainstream adoption within two years, according to Gartner’s 2024 Hype Cycle for Digital Workplace Applications. Everyday AI aims to reduce digital friction by assisting employees with tasks like writing, researching, and collaboration, making it a key element of DEX. This shift is critical as businesses focus less on hybrid work and more on integrating AI to enhance workforce productivity.

Everyday AI acts as a collaborator, improving speed and accuracy in work, from summarizing emails to generating reports with minimal input. This new era of AI-driven productivity offers both increased efficiency and marketable tools that help employees access, synthesize, and utilize information more effectively.

Challenges Associated with Remote Work

Distributed teams face difficulties with face-to-face communication and collaboration. Time zone differences remain a major challenge, with 62% of remote workers interacting with teammates across time zones, according to a Buffer report. Additionally, 21% of employers require employees to work within the same time zone under flexible work policies. These issues complicate knowledge transfer among employees. Glean addresses these challenges effectively with its AI-powered solutions.

Seamless Integration with Legacy Enterprise Solutions Will Drive Broader Adoption

Glean’s connectors and API integrations play a vital role in seamlessly integrating the platform with a wide range of enterprise applications and data sources. These connectors allow Glean to access, index and provide real-time search capabilities across various platforms, such as Google Drive, Salesforce, Slack, and many others. This integration ensures that users can search for information stored in different systems from a single interface, significantly enhancing productivity by eliminating the need to switch between multiple applications. Additionally, Glean respects each connected application’s security and access permissions, ensuring that users only see content they are authorized to access, thereby maintaining data privacy and compliance. The API integrations further enable customization and flexibility, allowing enterprises to embed Glean’s search functionality into their existing workflows, automate tasks, and even develop custom AI-driven applications that leverage the organization’s data. Overall, these integrations provide a unified, scalable search experience that helps employees quickly access relevant information, improving efficiency and decision-making across the enterprise.

NVIDIA Collaboration: Glean collaborated with NVIDIA in March 2024. Combining Glean’s retrieval system with NIM microservices allows enterprises to build assistants that process documents from multiple sources while maintaining document access control policies. This solution can handle thousands of queries simultaneously, making it ideal for enterprise-scale applications. This integration allows users to choose from various large language models (LLMs) and build their own AI-based assistants, further improving the search and knowledge management experience.

• Google Cloud Collaboration: Built on Google Cloud, Glean leverages Google’s modern data stack, including BigQuery, DataFlow, and Vertex AI. The platform uses Cloud Dataflow to integrate user interactions with parsed information and trains semantic embeddings on Vertex AI to deliver personalized search experiences. This collaboration ensures the scalability, security, and efficiency of Glean’s enterprise search solution. The partnership allows Glean to harness Google’s ecosystem, providing real-time knowledge discovery and innovative indexing across applications.

• Expansion of AI LLM: Glean Platform has expanded its support for industry-leading large language models (LLMs), such as Anthropic’s Claude 3 Sonnet and Google’s Gemini 1.5, in addition to the existing support for OpenAI’s GPT 3.5 and 4 models. This expansion allows enterprises to choose their preferred LLMs while ensuring that data remains secure within the customer’s virtual private cloud (VPC). Glean’s adoption of these advanced models enables it to offer more robust and contextually relevant AI-driven search and knowledge management solutions.

Key Risks

Data Security Concerns could Hinder Adoption

Sharing internal databases with a third-party application could raise data breach concerns among the customer base. Glean faces challenges from rising privacy concerns and evolving data compliance policies, especially as it connects proprietary organizational data, including internal chat information. Data security risks become critical, particularly with plans to expand into regulated industries like financial services. Additionally, issues like hallucinations—where the language model generates incorrect but plausible information—highlight the need for ongoing mitigation strategies to ensure reliable responses. However, favorable customer testimonials are poised to tackle such issues.

95% report that integration issues impede AI adoption, 79% have security concerns, and 64% are concerned with ethical AI usage and adoption. Only 2% report there are no significant barriers to utilizing their data for AI, per Salesforce. Moreover, third-party apps can often access your network and can potentially introduce vulnerabilities. This includes unauthorised access, and network or malware infections. Hidden trackers are pieces of code that are embedded in third-party apps and can track your online activity. This can include your browsing history, location data, and social media activity. 

Intensifying Competitive Landscape

Glean’s proprietary AI-powered enterprise search and knowledge management are at risk of replication by emerging competitors or integration into offerings from established enterprise SaaS providers, which could erode its competitive advantage. Many existing AI companies have the technical capability to deliver AI-powered enterprise search and knowledge management solutions, representing a significant threat. For example, Snowflake trained an enterprise-grade generative AI model in just three months, using 1,000 GPUs and a $2 million investment, highlighting the rapid product development in the AI sector. Moreover, any web, mobile, or backend application can be developed 10X faster and 3X cheaper with generative AI, per AppMaster. With the increased accessibility of high compute power through GaaS providers and strong investor interest in AI, the barrier to entry has significantly decreased. Also, clients can easily move to alternative AI vendors or integrate AI solutions into their knowledge management and enterprise search processes. However, an early-mover advantage coupled with enterprises’ rapid adoption of AI favors Glean. Sustaining a technological edge is critical for Glean’s long-term success, requiring substantial investment in continuous enhancements of its platform and expansion into adjacent industries.

Industry Overview

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Enterprises are becoming more insight-driven, with consumer expectations for search evolving alongside data growth. To meet these demands, organizations must move beyond traditional search to enhance insights and business outcomes. Intelligent enterprise search leverages AI technologies like Natural Language Processing (NLP), semantic search, and Machine Learning (ML) to provide a relevant and engaging search experience. It serves as a single access point for both structured and unstructured data, enriching, searching, and analyzing content. By enabling real-time access to critical information, intelligent enterprise search drives decision-making benefits across industries and functions.

With enterprise AI investments surging, Glean is well-placed to seize emerging opportunities as companies increasingly prioritize AI-driven solutions for operational efficiency, cost reduction, and enhanced productivity. The number of US companies investing $10 million or more in AI is set to nearly double by 2025, per EY. Further, data from IDC suggests that AI spending in key sectors – software and information services, banking, and retail – is projected to reach $89.6 billion in 2024 and $222 billion by 2028. Glean’s enterprise search capabilities align with this growth, making it a pivotal player in the AI-driven productivity wave.

The global knowledge management software market is projected to grow from $12.7 billion in 2023 to $38.7 billion in 2030, at a CAGR of 17.3%, per Verified Market Research. Glean, with its AI-powered chatbot for enterprise knowledge management, is well-positioned to capitalize on this large and growing market.

The knowledge management software market is driven by several key factors underscoring the importance of effective knowledge management. One major driver is the increasing need for efficient knowledge sharing, as businesses recognize the necessity of effectively managing and distributing information among employees. Knowledge management software streamlines this process, enabling organizations to gather, organize, and share data seamlessly.

Another significant factor is the rising demand for collaboration solutions. With teams becoming more remote and global, centralized platforms that simplify information sharing and enhance collaboration are essential. This highlights the vital role of knowledge management software in fostering teamwork.

Companies are also focused on boosting employee productivity. Knowledge management solutions provide quick access to relevant information, significantly reducing the time spent searching for data and improving workforce efficiency.

The global enterprise search market was estimated at $4.2 billion and is projected to grow at a CAGR of 8.9%, per Grandview Research. Glean, with its industry-leading funding stands at the pole position to capitalize on this large and growing market. 

The trend of digitization across industries is driving significant market growth for enterprise search solutions, allowing employees to search through vast amounts of data quickly. These solutions greatly reduce search times, enhancing productivity, while providing essential security features to prevent unauthorized access. By implementing security layers, companies can restrict data access to specific personnel.

The demand for enterprise search is particularly pronounced in large organizations with extensive data, both on-premises and in the cloud. This need is especially critical in industries like banking and finance, where secure and immediate access to sensitive client data is vital for operations. As a result, the adoption of enterprise search services is expected to grow in sectors that regularly manage sensitive information.

The enterprise search market has experienced substantial growth in recent years, accelerated by the COVID-19 pandemic. The crisis heightened demand as businesses sought to leverage increased automation and digitalization. Government-imposed measures, including social distancing and lockdowns, forced many companies to transition to digital technologies, driving rapid digital transformation. Additionally, economic uncertainties prompted organizations to pursue cost-effective solutions, enabling swift scaling of cloud-based deployments for remote users without heavy infrastructure investments.

Financials

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Disclaimer: Glean has not released audited financials and is not expected to do so until it files for IPO. The revenue model and the implied valuation are preliminary and are based on Manhattan Venture Research’s internal assumptions and will be adjusted to reflect any incremental information.

Glean generated a revenue of $39M in 2023, up 290% from 2022, , per Sacra, a market research firm. In 2023, the startup accounted for a 0.3% share in the global knowledge management software market. Considering the early mover advantage of Glean in the AI-powered knowledge management space, we project that the company could capture at least 2% of the global knowledge management software market by 2030. Based on these data points the revenue projections are as follows:

Glean’s revenue for 2023 is considered as per estimates by Sacra. Revenue for 2022 is estimated by applying the 290% year-over-year growth rate estimated by Sacra. The global knowledge management market is projected to reach $38.7 B by 2030, per Verified Market Research. Assuming Glean can capture at least 2% of this market, up from 0.3% in 2023, the revenue for 2030 could be roughly $774 M.

Private Market Valuation

Atlassian went public 18 months after its secondary market funding, at a valuation of 4,400 M, a 33% markup from its latest funding round. Since Glean is offering AI-powered knowledge management solutions, it is reasonable to project a valuation markup in the similar range of 25-35% on its last valuation to derive a current valuation.

Funding Rounds & Private Valuations

Glean has secured around $615M in funding across five funding rounds. Glean’s approach of integrating AI with enterprise knowledge management has resonated with both customers and investors, leading to significant investor interest since 2022. Notably, the company raised $100M in 2022, followed by a $200M series D round in February 2024. The company’s ability to attract investment has continued to grow, with its latest funding round – a $260M Series E in September 2024 with investors including Altimeter Growth, DST Global, Coatue, Craft Ventures, General Catalyst, ICONIQ Growth, Institutional Venture Partners, Kleiner Perkins, Lightspeed Venture Partners, Sapphire Ventures, Sequoia Capital, and SoftBank. The latest funding round valued the company at $4.6B, a 109% markup from its valuation of $2.2B post-series D in February 2024. 

Comparative Public Multiples

The following table shows the public peer multiples of knowledge management software firms. These multiples provide a useful reference for valuing Glean. Given the early mover advantage of Glean in AI-powered enterprise knowledge management, we believe the startup’s valuation multiple should command a premium over its public peers.

About the Analyst

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Santosh Rao

Santosh Rao has over 25 years of experience in equity research with a primary focus on the technology and telecom sectors. He started his equity research career at Prudential Securities and later moved to Dresdner Kleinwort Wasserstein, Gleacher & Co, and Evercore Partners, where he followed Telecom and Data Services. Prior to joining Manhattan Venture Partners, he was the Managing Director and Head of Research at Greencrest Capital, focusing on private market TMT research. Santosh has an undergraduate degree in Accounting and Economics, and an MBA in Finance from Rutgers Graduate Business School. While at Gleacher & Co he was ranked leading telecom equipment analyst by Starmine/Financial

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Disclaimer

I, Santosh Rao, Head of Research, certify that the views expressed in this report accurately reflect my personal views about the subject, securities, instruments, or issuers, and that no part of my compensation was, is, or will be directly or indirectly related to the specific views or recommendations contained herein.

Manhattan Venture Research is a wholly-owned subsidiary of Manhattan Venture Holdings LLC (“MVP”). MVP may currently and/or seek to do business with companies covered in its research report. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. This document does not contain all the information needed to make an investment decision, including but not limited to, the risks and costs.

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