Mercor, a startup that connects firms like OpenAI and Meta with area specialists wanted to coach and refine their foundational AI fashions, is in discussions with traders for a Sequence C spherical, based on a advertising doc considered by TechCrunch and two sources conversant in the deal talks.
Felicis, a returning investor, is contemplating doubling down on the corporate for the Sequence C, based on two sources. Felicis declined to remark.
The corporate is at the moment concentrating on a valuation of $10 billion or extra, one individual stated. That’s up from an $8 billion goal valuation that the corporate mentioned a few months in the past, one individual stated. Nevertheless, phrases of the ultimate deal may nonetheless change.
The corporate has instructed potential traders that it already has a number of presents. VCs have been reaching out to Mercor preemptively with presents valuing the corporate at as a lot as $10 billion, the Data beforehand reported.
TechCrunch additionally understands that the corporate has introduced on at the very least two new traders to lift funds for the potential deal by particular objective automobiles (SPVs).
The corporate’s earlier spherical was introduced in February – a $100 million Sequence B at a $2 billion valuation led by Felicis.
Based in 2022, Mercor is approaching $450 million in annualized run-rate income, one individual stated. The corporate instructed TechCrunch in February that its annual income (calculated by multiplying the most recent month by 12) had reached $75 million at the moment. In March, Mercor CEO Brendan Foody posted on X that ARR was $100 million.
Techcrunch occasion
San Francisco
|
October 27-29, 2025
The corporate has instructed traders it’s on observe to hit the $500 million ARR milestone sooner than Anysphere, the startup that makes AI coding assistant Cursor, based on one supply conversant in the scenario. Anysphere famously hit $500 million in ARR a couple of 12 months after its product launched. In contrast to Anysphere, which remains to be burning money, Mercor generated $6 million in revenue within the first half of the 12 months, Forbes reported.
Mercor earns income by offering firms with specialised area specialists to carry out AI mannequin coaching — resembling scientists, medical doctors, and attorneys — and charging an hourly finder’s payment and matching charge for his or her work.
The corporate claims to provide knowledge labeling contractors to 5 prime AI labs, together with Amazon, Google, Meta, Microsoft, and OpenAI, in addition to to Tesla and Nvidia. In response to sources, an outsized portion of its income is coming from a subset of these manufacturers, together with OpenAI.
To additional diversify its enterprise mannequin, Mercor has been telling traders that it’s including extra software program infrastructure for reinforcement studying – a coaching methodology the place a mannequin or agent’s choices are verified or disputed, enabling it to include suggestions and enhance over time. The corporate additionally intends to finally construct an AI-powered recruiting market.
Nonetheless, Mercor faces competitors from firms like Surge AI, which is reportedly in talks to lift funding at a $25 billion valuation, in addition to from Turing Labs and different knowledge labeling companies like Scale AI which can be additionally increasing into RL companies. Some consider that OpenAI’s just lately launched hiring platform could lead on the AI big to create its personal human-expert-powered RL coaching service.
When reached for remark, Foody instructed TechCrunch, “We haven’t been attempting to lift in any respect,” and, “We flip down presents each month.” He additionally stated the corporate’s ARR is greater than $450 million. Nevertheless, he clarified that the corporate’s income consists of the overall quantity that clients pay Mercor for companies earlier than its contractors obtain their portion. He added this can be a frequent accounting follow really helpful by audit companies and utilized by rivals Surge AI and Scale AI.
The startup was co-founded in 2023 by Thiel Fellows and Harvard dropouts Brendan Foody (CEO), Adarsh Hiremath (CTO), and Surya Midha (COO). All three co-founders are nonetheless of their early twenties. To take the corporate to the subsequent stage, Mercor just lately appointed Sundeep Jain, a former chief product officer at Uber with many years of expertise, as its first president, Forbes reported.
Mercor was just lately sued by competitor Scale AI for misappropriation of commerce secrets and techniques. Scale AI alleges that certainly one of its former staff who later joined Mercor “stole greater than 100 confidential paperwork regarding Scale’s buyer methods and different proprietary data,” based on a replica of the lawsuit TechCrunch beforehand reviewed.
Maxwell Zeff contributed reporting