Summary:
Mercor is in talks for a Series C round targeting a valuation over $10 billion, up from $8 billion.
The startup has an annualized run-rate revenue of $450 million and generated $6 million profit in H1 2025.
It connects AI labs like OpenAI and Meta with domain experts, charging fees for matching and training services.
Founded by young Harvard dropouts, Mercor is expanding into reinforcement learning and an AI recruiting marketplace.
Faces competition from Surge AI and a lawsuit from Scale AI over alleged trade secret misappropriation.
Mercor's Meteoric Rise in AI Training
Mercor, a dynamic startup founded in 2022, is making waves by connecting major tech giants like OpenAI, Meta, Amazon, Google, Microsoft, Tesla, and Nvidia with domain experts essential for training and refining foundational AI models. The company is currently in discussions for a Series C funding round, with sources indicating a potential valuation of over $10 billion, up from an earlier $8 billion target.
Impressive Financial Performance
Mercor is approaching an annualized run-rate revenue of $450 million, a significant jump from the $75 million reported in February 2025 and the $100 million ARR mentioned by CEO Brendan Foody in March. The company has generated $6 million in profit in the first half of the year, showcasing profitability in a competitive landscape.
Business Model and Expansion
Mercor earns revenue by charging an hourly finder's fee and matching rate for providing specialized experts such as scientists, doctors, and lawyers. To diversify, the company is adding software infrastructure for reinforcement learning and plans to build an AI-powered recruiting marketplace.
Competitive Landscape and Challenges
Despite its success, Mercor faces competition from firms like Surge AI (reportedly seeking a $25 billion valuation), Turing Labs, and Scale AI, which is also expanding into reinforcement learning services. Additionally, Mercor was recently sued by Scale AI for misappropriation of trade secrets, alleging theft of confidential documents.
Leadership and Background
Co-founded in 2023 by Thiel Fellows and Harvard dropouts Brendan Foody (CEO), Adarsh Hiremath (CTO), and Surya Midha (COO), all in their early twenties, Mercor has recently appointed Sundeep Jain, former chief product officer at Uber, as its first president to scale operations.
Investor interest remains high, with Felicis considering doubling down in the Series C, and the company has brought on new investors via special purpose vehicles (SPVs). Mercor claims to have multiple offers and turns down funding proposals monthly, emphasizing its strong market position.
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