In a move that highlights the growing consolidation in the AI space, Visual Electric — an AI-powered design startup backed by Sequoia — announced that it’s joining forces with search engine startup Perplexity. The announcement was made via the Visual Electric website, and later confirmed by Perplexity’s CEO, Aravind Srinivas, in a post on X (formerly Twitter).
Although the financial terms of the deal haven’t been made public, what’s clear is that Visual Electric’s journey as an independent product is coming to an end. The team behind the startup will now be part of Perplexity’s new “Agent Experiences” division, contributing to the next phase of AI development.
Founded in 2022 by Colin Dunn (formerly of Facebook and Dropbox), Adam Menges (previously at Apple), and Zach Stiggelbout (formerly with Microsoft), Visual Electric was designed to help creatives bring their ideas to life using AI. The tool allowed designers to generate images and make adjustments on an endless digital canvas — sort of like brainstorming on a whiteboard, but with AI as your assistant. Later, they even added video creation tools.
Despite raising $2.5 million from high-profile investors like Sequoia, BoxGroup, and Designer Fund, Visual Electric will officially shut down in 90 days. Current users will be able to export their work, and subscribers will receive refunds based on how much time they had left on their plans.
While it’s the end of the road for Visual Electric as a standalone platform, its team is moving on to help build AI experiences at a broader scale — signaling that while products may come and go, talent and innovation in AI remain in high demand.
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