Parag Agrawal's AI start-up raises $100M to tackle web search
What's the story
Parallel Web Systems, an artificial intelligence (AI) start-up founded by former Twitter CEO Parag Agrawal, has raised $100 million in funding. The money will be used to develop web search infrastructure for AI agents and to fund deals with online content owners. The Series A round of funding, which values the company at $740 million, was co-led by venture firms Kleiner Perkins and Index Ventures. It also received participation from other existing backers including Khosla Ventures.
AI evolution
Agrawal on Parallel's mission
Parallel Web Systems aims to address a major shift in internet use, with AI agents becoming the main users. The company develops application programming interfaces (APIs) that allow AI systems to search the live web for real-time information. Agrawal said enterprise customers use Parallel's technology to power AI agents that write software code, analyze customer data for sales teams, and assess risk for insurance underwriting.
Tech superiority
How Parallel's tech works
Agrawal believes that Parallel's technology is better than built-in web search functions offered by AI-model providers. Unlike conventional search engines that rank links for humans to click, Parallel's system returns optimized content or "tokens," directly into an AI model's context window. This approach improves accuracy, reduces false information (or "hallucinations"), and cuts operational costs for customers.
Growth strategy
Funding to address paywall issues
The new capital will enable Parallel to focus on product development and customer acquisition. Some funds will also be used to tackle the problem of web content being locked behind paywalls and login barriers to prevent AI web scraping. Agrawal said Parallel plans to create an "open market mechanism," a new economic model to encourage publishers to keep content accessible for AI systems.