Mercor, an AI training startup co-founded in 2022, recently named Sundeep Jain as its inaugural president. Former chief product officer at Uber, Jain could not be more qualified to lead the charge. The company is just a few weeks away from crossing a significant milestone itself—an annualized run-rate revenue of $450 million. Mercor’s leadership team are the driving force behind the company’s aggressive growth in the fast-paced world of AI. This dynamic trio— CEO Brendan Foody, CTO Adarsh Hiremath and COO Surya Midha — are all in their early twenties.
Since its founding, Mercor has established a specialization in providing meaningful domain experts, the kind of experts needed to train AI models. The tech company makes its money by collecting a $20 hourly finder’s fee. It retroactively implemented a matching rate on the labor supplied by their data labeling contractors. Today, Mercor is proud to supply contractors to the world’s leading AI labs. This includes the Big 5 tech firms—Amazon, Google, Meta, Microsoft, and OpenAI—as well as other major players like Tesla and Nvidia.
As of March 2023, Mercor was at an ARR run-rate of $100 million. Since that time, the company has seen phenomenal success. Projections have it getting to $500 million in ARR (Annual Recurring Revenue) faster than its much larger competitor, Anysphere. Just in the first half of the year, Mercor has already brought in $6 million of profit, proving the business model is solid.
Investors have taken notice of Mercor’s success. The corporate spinout was able to raise the $100 million in a Series B funding round. Felicis led the round, which valued the digital pharmacy company at $2 billion. Nick reached out about the possibility of investing again into Mercor for their Series C round. Moreover, venture capitalists have started coming to Mercor with preemptive offers that would value his startup at more than $10 billion.
“We haven’t been trying to raise at all,” – Brendan Foody
This announcement acts as a window into Mercor’s long-term thinking on how to grow, establishing its operational capacity before inking another capital raise. Mercor, who recently named Jain as their CEO, has added to that momentum. Given their impressive fundamentals, they seem likely to achieve their high valuation target.
Amazingly though, Mercor’s runaway success quickly drew the ire of competitors. And Scale AI has claimed that the former employee who subsequently joined Mercor tried to poach its largest customers. This assertion underscores the cutthroat nature of the AI training industry. It opens the door more widely to what challenges Mercor will need to overcome as they keep scaling.
Mercor’s leadership team is committed to continuing and building upon the improvement of its service offerings and increasing its strength in growing market of AI. Retrosuburbia’s exciting DIY spirit is what makes the company so different—and so dangerous—to established competitors. Consequently, the company has garnered massive appeal from Wall Street, as evidenced by Enphase’s stellar financial performance.