Micro1 Raises $35M for AI Data Labeling Services

Micro1, a platform for sourcing human contractors, has secured a $35 million Series A round at a $500 million valuation. O1 Advisors, the venture firm from former Twitter executives Dick Costolo and Adam Bain, led the investment into the three-year-old startup.

Capitalizing on Market Shifts

The funding arrives as major AI labs seek alternatives to market leader Scale AI. Following a significant investment in Scale AI by Meta, companies like OpenAI and Google have reportedly reduced their reliance on the provider, creating an opportunity for new firms focused on AI data labeling.

Micro1 has consequently seen rapid expansion, growing its annual recurring revenue from $7 million to $50 million in 2025. While this is smaller than competitors like Mercor, the company reports it is now working with Microsoft and several other Fortune 100 companies.

As part of the deal, Adam Bain will join Micro1's board of directors.

The company differentiates itself by focusing on high-quality AI training data from vetted domain experts. Micro1 uses an AI recruiter named Zara to interview and onboard specialists like senior software engineers and doctors, moving beyond the low-skilled contractor model. Additionally, the company is developing new virtual "environments" to help clients train advanced AI models on simulated tasks.