Mercor in Talks for Series C Funding at Potential $10 Billion Valuation

Mercor, the fast-growing startup that links top AI companies like OpenAI and Meta with domain experts to help train and refine foundational models, is in discussions with investors for a major Series C round, according to two people familiar with the matter and a marketing document reviewed by TechCrunch.

One source revealed that the company is seeking a valuation of $10 billion or higher, a significant jump from the $8 billion target floated in earlier talks. However, the final terms of the funding round are still under negotiation.

Mercor’s last funding announcement came in February 2025, when it raised $100 million in Series B financing led by Felicis, at a valuation of $2 billion. Felicis declined to comment on the ongoing deal discussions.

Sources added that Mercor has already received multiple unsolicited offers from VCs, with some valuing the startup as high as $10 billion, a development previously reported by The Information.

At least two new investors are also said to be exploring the use of special purpose vehicles (SPVs) to participate in the round, though none have been formally approved by the company yet.

Explosive Growth and Profitability

Founded in 2022, Mercor has seen extraordinary growth. One person close to the matter claimed that the company is approaching $450 million in annualized run-rate (ARR) revenue. Back in February, Mercor reported $75 million in ARR, which had doubled to $100 million by March, according to CEO Brendan Foody’s post on X.

By mid-2025, the company was already profitable, generating $6 million in earnings in the first half of the year, Forbes reported — a stark contrast to rival Anysphere, whose AI coding assistant Cursor hit $500 million ARR within a year but remains unprofitable.

Mercor has also told investors it expects to hit $500 million ARR faster than Anysphere, a benchmark seen as a symbolic milestone in the AI infrastructure space.

How Mercor Makes Money

The startup earns revenue by supplying companies with specialized domain experts — such as scientists, doctors, and lawyers — to help with AI training tasks. Mercor charges an hourly finder’s fee and matching rate for these experts.

According to sources, Mercor provides human experts and data labeling contractors to five major AI labs — including Amazon, Google, Meta, Microsoft, OpenAI, and Nvidia. However, a large portion of revenue comes from a smaller set of these customers, particularly OpenAI.

Looking ahead, Mercor has been pitching investors on plans to expand into reinforcement learning (RL) infrastructure, a process that allows AI systems to incorporate feedback and improve decision-making. The startup is also eyeing the creation of an AI-powered recruiting marketplace.

Competitive Landscape

Despite its momentum, Mercor faces stiff competition. Rivals include:

• Surge AI, reportedly in talks to raise funds at a staggering $25 billion valuation.
• Scale AI, already a major player in data labeling and now expanding into RL services.
• Turing Labs and other contractors entering the same niche.

Some industry observers also note that OpenAI’s new hiring platform could eventually evolve into its own in-house expert-powered RL training service, directly challenging Mercor’s core business model.