Mercor, which connects AI labs and subject matter experts to train basic AI models, has raised $350 million at a $10 billion valuation, the company confirmed to TechCrunch.
Felicis Ventures led the company’s previous $100 million Series B at a $2 billion valuation and is leading this round as well. Existing investors Benchmark and General Catalyst and new investor Robinhood Ventures also participated.
TechCrunch reported in September that Mercor was in talks with investors to raise a Series C at a valuation of $10 billion, above its target of $8 billion a few months ago. At the time, the company told potential investors it already had multiple offers.
Mercor started as an AI-driven recruitment platform, but quickly pivoted to providing companies with subject matter experts (scientists, doctors, lawyers, etc.) to train AI models, and charging hourly search fees and matching fees for their work.
The company is also adding software infrastructure for reinforcement learning. This is a training method that validates or discusses the decisions of a model or agent, allowing them to incorporate feedback and improve over time. The company ultimately plans to build an AI-powered recruitment marketplace.
Mercor’s fortune rose after major AI labs including OpenAI and Google DeepMind reportedly cut ties with data labeling startup Scale AI after Meta invested $14 billion in the data vendor and hired a CEO.
The company appears to have told investors that it is on track to hit $500 million in ARR, faster than Anysphere, the startup behind Cursor, which famously reached the milestone about a year after launching its flagship product.
“Since we founded Mercor nearly three years ago, AI has advanced at an incredible pace. But AI still struggles with the subtleties that drive economically valuable work: balancing tradeoffs, understanding intent, developing preferences, and deciding not just what can be done, but what should be done,” the company said in a blog post emailed to TechCrunch.
The company said it is currently paying contractors more than $1.5 million per day. The company has more than 30,000 registered professionals who earn an average hourly wage of more than $85.
Melkor said it will focus on three areas: expanding its talent network, improving its system for matching contractors and customers, and developing new products to automate more processes.
