AI startup Mercor now valued at $10 billion with new $350 million funding round

Mercor, a startup specializing in artificial intelligence, has announced a significant milestone, achieving a valuation of $10 billion following a recent Series C funding round. This marks a remarkable fivefold increase since its last funding round in February. In a blog post released on Monday, the company revealed that it secured $350 million in this latest round, which was spearheaded by Felicis, a firm that also led its previous $100 million Series B round. Other notable participants in the funding included Benchmark, General Catalyst, and new investor Robinhood Ventures. The fresh capital will be directed towards three main initiatives: enhancing its talent network, improving the matching systems between industry experts and training opportunities, and accelerating service delivery. Founded by three Thiel Fellows, Mercor originally focused on recruitment by analyzing candidates' interview transcripts, resumes, and personal portfolios. However, the company pivoted to train AI models after recognizing its growing network of specialized experts. Currently, Mercor oversees a workforce of over 30,000 contractors, collectively earning more than $1.5 million per day. These professionals contribute by imparting knowledge, experience, and context to AI agents, helping them to think more like humans, as highlighted in the company's blog. The startup's strategic pivot to data-labeling was timed well with Meta's acquisition of a 49% stake in Scale AI for $14.3 billion in June. This move led to changes in Scale AI's leadership, with founder Alexandr Wang stepping down to join Meta, prompting concerns about the company's neutrality. This shift reportedly caused major AI labs, including Google and OpenAI, to sever ties with Scale AI. Adarsh Hiremath, one of Mercor’s cofounders, noted the unusual nature of their competitor facing such a sudden setback. Despite the challenges, Mercor is still navigating a competitive data-labeling landscape, with rivals like Surge AI reportedly targeting a new funding round of up to $1 billion. Other competitors in the space include Turing AI, which reached a valuation of $2.2 billion in March, and Invisible Technologies, which raised $100 million in September to surpass a valuation of $2 billion.