Snorkel AI tripled its valuation to 3.5 billion dollars after a Series E round of 350 million dollars
Snorkel AI raised 350 million dollars in Series E at a valuation of 3.5 billion dollars (previously 1.3 billion), led by Insight Partners and S32. Annualized revenue run-rate of 375 million dollars, with 18x growth over a year driven by demand for AI training data.
Snorkel AI raised 350 million dollars in a Series E round at a valuation of 3.5 billion dollars. The round was led by Insight Partners and S32, with existing investors Addition, Lightspeed, Greylock, GV and Wells Fargo also participating. The valuation thus tripled from the 1.3 billion dollars that Snorkel AI reached in a Series D round of 100 million dollars 17 months ago.
Snorkel AI originally offered software to automate data labeling, but since last year it has shifted to a data-as-a-service model — supplying ready-made datasets. According to the company, this is a hybrid approach in which data is generated synthetically using its own software and models in combination with work by subject matter experts.
According to Snorkel AI, its annualized revenue run-rate has reached 375 million dollars, an eighteenfold increase over the past 12 months; the company says growth is driven by demand from AI labs for high-quality training data. Other companies in the sector have recorded similar growth: gross annualized revenue at Mercor reached 2 billion dollars, Handshake exceeded 1 billion dollars and Micro1 reached 500 million dollars. The source notes that these companies pay roughly 60 to 70 percent of their gross revenue directly to the experts doing the work, so their actual net annual income is substantially lower than the reported gross figures. Snorkel AI says it sells ready-made RL environments and datasets, rather than human labor, so it accounts for payments to experts as cost of goods sold, rather than as part of its headline revenue figure.
Snorkel AI launched commercially in 2019 after four years of research by co-founder and CEO Alex Ratner and his team at the Stanford AI lab.
Why it matters
The report shows how quickly the market for suppliers of training data and RL environments for AI labs is growing, which is particularly relevant to investors and companies that buy these services or compete with them. The comparison with Mercor, Handshake and Micro1 also suggests that gross revenue figures in this sector cannot be compared without accounting for the high share of payments to experts.
Relevant practical impact
What this means
For a business
The market for AI training data is growing rapidly and offers companies building their own models more established suppliers of data and RL environments; rising valuations for Snorkel AI and competing companies Mercor, Handshake and Micro1 signal demand, but the actual costs of these services are also affected by the high share of payments to experts.
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Event sources
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