Mercor, a startup that connects companies with specialized domain experts for training and refining foundational artificial intelligence (AI) models, is reportedly in discussions for a Series C funding round, targeting a valuation of $10 billion or more. This information was disclosed in a marketing document viewed by TechCrunch and corroborated by two sources familiar with the ongoing deal talks.
The target valuation marks an increase from an $8 billion figure discussed by the company a few months prior, according to one source. Venture capital firms have reportedly approached Mercor preemptively with offers valuing the company at up to $10 billion, as previously reported by The Information. Felicis, an existing investor, is reportedly considering a significant new investment in the Series C round, though the firm declined to comment.
Mercor previously announced a $100 million Series B round in February at a $2 billion valuation, also led by Felicis. Founded in 2022, the company is approaching $450 million in annualized run-rate revenue, according to one individual close to the matter. In February, Mercor reported $75 million in annual revenue to TechCrunch, with CEO Brendan Foody subsequently posting on X that ARR had reached $100 million in March. Foody clarified that Mercor's revenue figures include the total amount paid by customers for services before contractors receive their portion, a common accounting practice cited by the CEO.
The company generates revenue by providing experts—including scientists, doctors, and lawyers—to perform AI model training for clients such as OpenAI, Meta, Amazon, Google, Microsoft, Tesla, and Nvidia. Sources indicate that a substantial portion of its revenue originates from a subset of these major AI laboratories, including OpenAI. To diversify its offerings, Mercor has informed investors of plans to integrate more software infrastructure for reinforcement learning and eventually develop an AI-powered recruiting marketplace.
Despite its growth, Mercor operates in a competitive landscape, facing rivals like Surge AI, which is reportedly seeking funding at a $25 billion valuation, and Scale AI, a firm that has also expanded into reinforcement learning services. OpenAI's recently launched hiring platform could also introduce new competitive dynamics. Mercor was recently sued by Scale AI for alleged misappropriation of trade secrets.
Brendan Foody, Mercor's CEO, stated to TechCrunch that the company "hasn't been trying to raise at all" and "turns down offers every month," asserting that the company's ARR exceeds $450 million. Mercor also recently appointed Sundeep Jain, former chief product officer at Uber, as its first president to support its expansion.
