SAN FRANCISCO – In a blockbuster funding round that underscores the ferocious demand for high-quality AI training data, startup Mercor announced Monday it has raised $350 million at a staggering $10 billion valuation, cementing its status as a major player in the burgeoning AI ecosystem.
The Series C round, led by existing investor Felicis, represents a fivefold increase in the company’s value since its Series B just last February. The round saw continued participation from Benchmark and General Catalyst, alongside new investor Robinhood Ventures.
The massive influx of capital is a direct bet on Mercor’s unique pivot. Founded by three Thiel Fellows, the company began as an AI-powered hiring platform. However, in the process, it inadvertently built a vast network of highly skilled professionals. Recognizing a greater opportunity, Mercor shifted its focus to employing these experts to train complex AI models for other companies.
“Mercor now manages over 30,000 contractors, who are collectively paid over $1.5 million each day,” the company stated in a blog post. These contractors “teach agents to think more like humans by sharing knowledge, experience, and context that can’t be captured in code alone.”
Mercor’s dramatic rise was catalyzed by a seismic shift in its competitive landscape. In June, a $14.3 billion investment from Meta for a 49% stake in Mercor’s primary rival, Scale AI, reportedly raised concerns about neutrality among major AI labs like Google and OpenAI. The deal led to Scale AI’s founder stepping down and created a vacuum in the market.
“It just doesn’t happen too often in startups where your biggest competitor gets torpedoed overnight,” Mercor cofounder Adarsh Hiremath told Forbes.
The company plans to deploy the new funds into three key areas: expanding its global talent network, advancing its AI-powered matching systems to connect experts with training projects, and accelerating delivery speeds for its clients.
Despite its rapid ascent, Mercor faces a crowded and well-funded field. Competitors like Surge AI are reportedly seeking up to $1 billion in new funding, while rivals Turing AI and Invisible Technologies have also achieved multi-billion dollar valuations in recent months.
The funding round signals that as the AI arms race intensifies, the companies providing the essential human intelligence to fuel it are becoming increasingly valuable.