Mercor, founded by three Thiel Fellows who dropped out of Harvard, is reportedly pursuing a Series C funding round targeting a $10 billion valuation amid surging demand from artificial intelligence companies for specialized training experts.
Series C Funding Round Targets Record Valuation
The company has increased its valuation target from $8 billion discussed months earlier. Multiple venture capital firms have proactively approached Mercor with offers reaching the $10 billion threshold, though final terms remain subject to change, TechCrunch reported, citing sources.
Returning investor Felicis is considering doubling down on the investment, according to the report.
Mercor did not immediately respond to Benzinga's request for comment.
Revenue Growth Accelerates Amid AI Boom
Founded in 2022, Mercor approaches $450 million in annualized run-rate revenue, representing explosive growth from $75 million ARR reported in February. CEO Brendan Foody posted on X in March that ARR had reached $100 million.
Mercor earns revenue by providing specialized contractors—scientists, doctors and lawyers—to perform AI model training for an hourly finder’s fee and matching rate.
The company serves five major AI labs including Amazon.com Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), Meta Platforms Inc. (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), OpenAI, Tesla Inc. (NASDAQ:TSLA) and NVIDIA Corp (NASDAQ:NVDA).
Young Founders Scale Rapidly
The startup was co-founded in 2023 by Thiel Fellows Foody, Adarsh Hiremath (CTO) and Surya Midha (COO). All three remain in their early twenties.
Peter Thiel‘s influence on Silicon Valley extends through his $100,000 fellowship program, which pays young innovators to skip college and pursue entrepreneurship. The PayPal Holdings Inc. (NASDAQ:PYPL) co-founder has famously compared elite universities to “Studio 54 nightclubs” and called higher education a bubble, arguing students get trapped in debt without meaningful returns.
To support growth, Mercor appointed former Uber chief product officer Sundeep Jain as its first president. The move signals the company’s transition from startup to established enterprise.
Competition Intensifies in AI Training Market
Mercor faces competition from Surge AI, reportedly seeking funding at a $25 billion valuation, and established players like Scale AI and Turing Labs expanding into reinforcement learning services.
Scale AI recently sued Mercor for alleged trade secret misappropriation, claiming a former employee “stole more than 100 confidential documents concerning Scale’s customer strategies,” according to court filings reviewed by TechCrunch.
Despite competitive pressures, Foody told TechCrunch the company “hasn’t been trying to raise at all” and “turns down offers every month.” He confirmed ARR exceeds $450 million but clarified revenue figures include total customer payments before contractor compensation.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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