AI ( Artificial Intelligence ) Mercor, a startup that is recruiting, has reached a new valuation of $10 billion, and its three founders have broken the record for the youngest self-made billionaires.
Mercor recently announced in a blog post that it has completed a $350 million funding round led by investment firm Felicis, raising the company's valuation to $10 billion. According to Forbes, the three 22-year-old founders each hold approximately 22% of the company's shares, making them the youngest self-made billionaires in tech history, surpassing the record set by Meta CEO Mark Zuckerberg at age 23.
Public information shows that Mercor was co-founded in 2023 by Brendan Foody (current CEO), Surya Midha (Chairman of the Board), and Adarsh Hiremath (Chief Technology Officer). The first two attended Georgetown University in the United States, while Hiremath attended Harvard University.
The three met in high school and all received the Thiel Fellowship, a scholarship established by Peter Thiel, a well-known conservative investor in Silicon Valley, which supports about 20 college dropouts each year to start their own businesses, with each recipient receiving $100,000.
Initially, Mercor positioned itself as a recruitment platform, primarily connecting Indian engineers with American companies seeking freelance programmers. It provided recruitment assistance to companies by analyzing candidate information such as interview records, resumes, and portfolios. Within a few months, the company's revenue quickly reached $1 million.
After building a professional recruitment and evaluation system, Mercor entered the currently booming field of data annotation, shifting its business focus to "recruiting highly skilled professionals to provide training support for AI models," thus inputting "human intelligence" from experts in vertical fields into AI. In September 2024, Mercor completed a $32 million Series A funding round; in February of this year, the company completed a $100 million Series B funding round, reaching a valuation of $2 billion.
In June of this year, as Zuckerberg launched a race for AI talent in Silicon Valley, Meta acquired a 49% stake in AI data labeling company Scale AI for $14.3 billion, and appointed the latter's founder and CEO, Alexander Graham, as CEO. Alexandr Wang joined Meta. However, this has led to concerns about Scale AI's neutrality, with major AI companies such as Google and OpenAI terminating their partnerships with Scale AI.
This opens up greater opportunities for growth for Scale AI's competitor, Mercer. In September, Mercer CEO Steve Foddy announced that the company's annualized revenue (ARR) had reached $500 million, a significant increase from $100 million in March. Meanwhile, Mercer pays over $1.5 million daily to its more than 30,000 contractors.
However, Mercor still faces pressure from several competitors in the data annotation field. For example, Surge AI, a veteran company founded in 2016, is planning a new round of financing, targeting $1 billion; in March of this year, Turing AI, a long-time partner of OpenAI, reached a valuation of $2.2 billion.
In addition, in September of this year, Scale AI sued Mercer for allegedly stealing trade secrets. Scale AI alleged that a former executive who moved to Mercer improperly downloaded and saved more than 100 confidential documents and shared them with his new employer. In response, Mercer stated, "While Mercer has hired many people who have left Scale, we have no interest in any of Scale's trade secrets."
(Source: The Paper)
