AI recruiting startup Mercor eyes $10 billion Series C valuation
Mercor, the fast-rising startup that supplies domain experts to leading artificial intelligence companies, is in talks with investors for a Series C round that could value the company at more than $10 billion, according to documents viewed by TechCrunch and sources familiar with the discussions.
Felicis, which led Mercor’s $100 million Series B round earlier this year at a $2 billion valuation, is weighing a deeper investment in the upcoming round, two people said. The firm declined to comment. Sources added that venture capitalists have been reaching out to Mercor proactively, with multiple offers already on the table, some valuing the company at the $10 billion mark.
Explosive Growth
Founded in 2022, Mercor has quickly emerged as a key player in the AI ecosystem by connecting companies such as OpenAI, Meta, Microsoft, and Google with domain specialists — doctors, scientists, lawyers, and others — who help train and refine foundational AI models. The company charges a finder’s fee and matching rate for each expert placed.
Mercor is now generating roughly $450 million in annualized run-rate revenue, up from $75 million reported in February. CEO Brendan Foody recently claimed that ARR is even higher, though he clarified that revenue figures include gross customer payments before contractors are paid — an accounting method also used by rivals Surge AI and Scale AI. The startup also reported $6 million in profit during the first half of 2025, a rarity in the sector where many peers are still burning cash.
At its current trajectory, Mercor expects to surpass $500 million ARR faster than Anysphere, the maker of AI coding assistant Cursor, which famously hit the milestone about a year after launch.
Expanding Beyond Data Labeling
While Mercor’s core business revolves around supplying data-labeling contractors to five of the world’s largest AI labs — Amazon, Google, Meta, Microsoft, and OpenAI — the company has been pitching investors on diversification. It is building new software infrastructure to support reinforcement learning (RL), a training approach that incorporates feedback into AI decision-making. Longer term, Mercor envisions an AI-powered recruiting marketplace.
The expansion comes as competition heats up. Surge AI is reportedly eyeing a $25 billion valuation, while Scale AI and other firms are also moving into reinforcement learning. OpenAI itself has introduced a hiring platform that some see as a precursor to its own expert-driven RL training services.
Challenges on the Horizon
Despite its meteoric rise, Mercor faces hurdles. The company was recently sued by rival Scale AI, which alleges misappropriation of trade secrets. The complaint claims that a former Scale employee who later joined Mercor took more than 100 confidential documents related to customer strategies and proprietary data.
Mercor’s young leadership team — co-founders Brendan Foody (CEO), Adarsh Hiremath (CTO), and Surya Midha (COO), all Thiel Fellows and Harvard dropouts in their early twenties — has been bolstered by the recent hire of Sundeep Jain, Uber’s former chief product officer, as president.
When asked about the fundraising process, Foody downplayed the activity: “We haven’t been trying to raise at all. We turn down offers every month.” Still, with investors circling and its valuation target climbing, Mercor appears poised to remain one of the most closely watched companies in the AI infrastructure space.
