Team Startupcity

•  Micro1 raises Series A funding at a $500M valuation, backed by 01A and LG Technology Ventures.
•  Annual revenue surges from $10M to $50M, with projections to cross $100M by September 2025.
•  Gains momentum as Scale AI loses major clients like Google and OpenAI after CEO’s move to Meta.
 

Micro1, a quick-rising challenger to Scale AI, is closing out its Series A round at $500 million valuation. The company is focused on data labeling solutions for AI labs   a rapidly expanding industry in response to growing demand for high-quality, human-curated data sets employed to train sophisticated AI models.

What differentiates Micro1 is its AI-driven recruitment platform, which allows AI labs to recruit specialized professionals rather than drawing on large teams of cheap labor. That strategic pivot has fueled the company's rapid growth.

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The annual recurring revenue (ARR) of Micro1, investor communications say, jumped from $10 million to more than $50 million this year. The firm anticipates it will reach $100 million ARR by September's end.

The startup's board has recently added Adam Bain, ex-COO of Twitter. Tier 1 venture capital companies such as 01A and LG Technology Ventures are taking part in the round, which is a testament to the investors' confidence in Micro1's path.

Micro1's growth is in response to difficulties experienced by Scale AI, a San Francisco data labeling company. Scale has just lost big-name clients including Google and OpenAI, following its CEO Alexandr Wang's recent appointment as Chief AI Officer at Meta to lead its new Superintelligence Labs. Fears over leakage of confidential research to Meta have already led a number of clients to re-think collaborations with Scale.

While that is happening, another Scale AI competitor, Surge AI, is said to be raising close to $1 billion, after a year where it earned more than $1 billion in revenue.

As the pace of AI development continues around the world, companies such as Micro1 are taking advantage to shift the way training data is acquired and delivered   paving the way for a new generation of competition in the space of AI infrastructure.