Key Highlights:
- ElevenLabs raised $500 million at an $11 billion valuation, more than tripling its worth from one year ago
- The company confirmed plans to expand its creative offering, including Eleven Music, its AI music generator
- Licensing deals with Kobalt and Merlin position ElevenLabs as the legally safe option for enterprise clients
$11 Billion Valuation Dwarfs Suno’s $2.45 Billion
ElevenLabs is now valued at nearly five times its closest AI music rival. The London and New York-based company closed a $500 million Series D round on February 5, 2026, led by Sequoia Capital. This brings total funding to $781 million since its 2022 founding.
The ElevenLabs AI music generator launched six months ago as a direct competitor to Suno and Udio. But the company is not chasing viral hits. It is building a full media production stack for enterprise clients who need legally cleared audio.
Over 60% of Fortune 500 companies already use ElevenLabs tools. Annual recurring revenue sits at $330 million.
Sequoia Leads Round With Major Investor Support
The Series D announcement confirmed Sequoia partner Andrew Reed will join the board. Andreessen Horowitz quadrupled its stake. ICONIQ tripled its support.
“From world-leading research to mind-bending creative tools to enterprise voice agents at scale, ElevenLabs is changing how people communicate and interface with technology,” Reed said.
New investors include Lightspeed, Evantic, and BOND. Existing backers BroadLight, NFDG, Valor Capital, AMP Coalition, and Smash Capital also participated. Additional investors will be disclosed later this month.
Co-founder Mati Staniszewski confirmed IPO ambitions. “We stay hungry, knowing how early this space still is, as we build toward IPO and beyond.”
Licensed Music Stack Targets Enterprise Clients
ElevenLabs holds Merlin and Kobalt licensing deals that competitors lack. These agreements create a 50/50 revenue split between publishing and recording rights, following AI music licensing models that prioritize artist compensation.
This matters because Suno faces an RIAA copyright lawsuit with damages up to $150,000 per song. One copyright claim tanks an entire ad campaign. For game studios, ad agencies, and corporate clients, ElevenLabs is the only viable path.
The best AI music generators comparison shows a clear split. Suno dominates creative output for viral moments. ElevenLabs dominates enterprise AI music production for commercial safety.
Two Markets Now Exist For AI Music Creators
If you use AI music for client work, YouTube monetization, or games, ElevenLabs offers legal protection that Suno cannot match. The Suno legal challenges continue to mount.
If you chase viral moments or build AI artist personas, Suno remains the stronger creative tool. Artists like Xania Monet and China Styles built audiences on Suno’s output quality.
The AI music market split in two. Ethical AI music tools now serve enterprise. Unlicensed tools serve creators willing to accept legal risk. Know which lane fits your work.”
