AI training startup Mercor is in discussions with investors for a Series C round. The company is targeting a valuation of $10 billion or more. This potential Mercor funding follows a $100 million Series B in February, which valued the company at $2 billion and was led by Felicis.
The company has reportedly received multiple preemptive offers from investors valuing it as high as $10 billion.
Rapid Growth and Profitability
Mercor is approaching $450 million in annualized run-rate revenue, a substantial increase from its $75 million ARR in February. Unlike many high-growth startups, the company was profitable in the first half of the year, generating $6 million. The company's revenue calculation includes the total amount customers pay before its contractors receive their portion.
The startup provides specialized domain experts to major technology companies, including OpenAI and Meta, to help train their complex AI models. To diversify its business, Mercor is building new software infrastructure for reinforcement learning and plans to launch an AI-powered recruiting marketplace. This new Mercor funding would accelerate these initiatives.
In a competitive market, Mercor faces rivals like Surge AI and Scale AI. The company is also currently involved in a lawsuit with Scale AI over alleged misappropriation of trade secrets. This latest Mercor funding round comes as the company navigates both market competition and legal challenges.
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Founded in 2022 by a team of Thiel Fellows, Mercor recently appointed former Uber CPO Sundeep Jain as its first president to guide its next phase of expansion.
