$10 felt a bit steep until I realized there is probably the economies of scale at play here.
1) There is a marginal payment overhead. I'd assume $0.50-0.75, leaving their amount down to $9-ish.
2) It's a fairly niche product with a still-small userbase. ~40k users at ~$9/mo = $360k/mo (I know there's $5/mo users and $25/mo users but I'd assume there are far more $5/mo and $10/mo users than $25/mo users)
3) They have to keep the service running 24/7/365, so you have to hire devs either across multiple time-zones or compensate them enough to be OK fighting fires at 2am.
As the user of a service things like payment overhead, a small userbase, and dev salaries aren't my problem. My only concern is what I'm getting for what I'm paying.
$5 a month for fewer than 10 searches a day is clearly not a good deal. $10 a month might be worth it for some, but an extra $15 a month on top of that for AI results is kind of crazy.
I don't know Kagi's financials, but this is usually the case for a lot of products with a smaller customer base. For example, a block of Kraft cheddar will be a lot cheaper than an equivalent-sized block from an organic local dairy. There's always a customer base that is willing to pay for a differentiating feature or value.
I'm satisfied paying for it because the product works well and saves me time. I can't say the same for a lot of the random $10 impulse buys I make in a month.
For me, it's also about voting with my wallet. I'm not enthusiastic about invasive ad tech. As it stands, nobody else offers what Kagi offers at any price. If there were an equivalent service for $5/month, I'd give it a look, but there isn't.
The way I think about it is how much time do I save by having better search results. I'm on a family plan currently, but was on an unlimimited 10/month plan. At the rate I value my time, Kagi needs to save me well under an hour per month through better search results. I'm quite confident it reaches and exceeds that bar relative to google. And that's even before you get into any philosophical/moral preferences for being the direct customer rather than being the product (as in ad-supported services).
That extra $15 a month is for access to LLMs. They currently support the Claudes, the GPTs (not o1), Mistral, Gemini, Llamma, Qwen QWQ, Nova, and DeepSeek. It's currently unlimited access in the standard chat format.
You can also choose if you want the chat to RAG search results into the context for additional info, and then cite those sources. To me, replacing a Claude/ChatGPT subscription with $15 on top of a company I already like, while also getting a bunch of other models was a no-brainer.
This. I used to host my private searxng service which is a bit like what Kagi is selling. Yes, Kagi offers site blocking, rewrites and pinning which is great. But the best part is the access to R1 combined with Kagi search which adds context.
You can just quickly write !ai to the toolbar and you have a deepseek chat open. Or !sum to summarize the current page or video.
1) There is a marginal payment overhead. I'd assume $0.50-0.75, leaving their amount down to $9-ish.
2) It's a fairly niche product with a still-small userbase. ~40k users at ~$9/mo = $360k/mo (I know there's $5/mo users and $25/mo users but I'd assume there are far more $5/mo and $10/mo users than $25/mo users)
3) They have to keep the service running 24/7/365, so you have to hire devs either across multiple time-zones or compensate them enough to be OK fighting fires at 2am.