Mercor pursues $20 billion valuation as it acquires Deeptune to control AI training stack

Mercor is in talks for a $20B valuation

AI training startup Mercor is reportedly in talks to raise a round at a $20 billion valuation, sources tell Bloomberg. That would be quite a jump from it's last value in October, when it raised a $350 million Series C at a $10 billion valuation. The conversations for this latest round are at early stages, the outlet noted, yet it reported that Mercor told investors it already received a term sheet at the new valuation. This report also comes as founder-CEO Brendon Foody took to X to say the company's annualized revenue run rate crossed $2 billion, a $100% increase from just four months ago. Mercor also announced on Thursday that it was buying Deeptune, a company that helps train AI agents. The entire Deeptune team will be joining Mercor as part of the acquisition, per its press release. The revenue numbers, acquisition and potential new funding signal that Mercor may have put its bumpy early 2026 troubles behind it. Earlier this year the company suffered a data breach and several of its contract workers filed lawsuits, Business Insider reported.

Mercor eyes a $20bn valuation and buys Deeptune

Mercor is in talks to double to a $20bn valuation and has bought an AI-training startup its own CEO backed as an angel. Behind the headline sit gross revenue, a spring data breach, and a conflict-of-interest question. A three-year-old startup run by a 23-year-old is in talks to double its worth to $20bn. The numbers are dazzling. Read the footnotes. Mercor, the AI training marketplace, has told investors it can raise at a $20bn valuation. It says it already holds at least one term sheet at that price, Bloomberg reports. The talks are early, and a deal might not close. The figure is striking for its speed. Mercor last raised in October, at a $10bn valuation. Nine months later, investors are being asked to pay double. The company recruits domain experts, such as engineers, lawyers and doctors, and pairs them with AI labs that need human judgment to train frontier models. Its customers include OpenAI, Anthropic and Google. Its founders are three former high-school debate teammates who dropped out of college. They became the world's youngest self-made billionaires at 22. The buy that raises eyebrows On the same day, Mercor announced it is buying Deeptune, a startup that builds the simulated software where AI agents practise real work before deployment. Think of a flight simulator, but for an agent learning to use a spreadsheet or Salesforce. Mercor confirmed the deal on its blog. Terms were not disclosed. There is a wrinkle. Andreessen Horowitz led Deeptune's $43m funding round in March. One of the angel investors in that same round was Brendan Foody, Mercor's chief executive. Three months later, his company bought it. Foody was candid about the sequence. The angel cheque was written with a purchase already in mind, he told Fortune: "It was in a lot of ways the main motivation, actually." Public reporting has not established whether Mercor's board or outside investors reviewed his personal stake before the deal closed. That is the question a $20bn price tag asks the board to answer first. The revenue number needs an asterisk Foody says Mercor's annualised revenue run rate has crossed $2bn, doubling in four months. The headline is real. The footnote matters more. That $2bn is gross billings, not what Mercor keeps. Contractors take home 60 to 70 percent of everything billed, first reported by The Information. Net of the experts who do the work, Mercor's own revenue is closer to $600m to $800m. At a $20bn valuation, that implies a multiple of roughly 25 to 33 times net revenue. Aggressive, though not unheard of for growth this fast. The breach it is trying to forget The valuation talks are more remarkable given where the company was in spring. In March, a supply-chain attack on an open-source library called LiteLLM exposed up to four terabytes of Mercor data. Meta, a big customer at the time, paused all work with the startup indefinitely. Class-action lawsuits followed. The hacking group Lapsus$ claimed responsibility. Mercor says the impact was "very limited". Foody speaks about it as the past, noting that OpenAI and Anthropic stayed on and that revenue doubled in the months since. That is either a display of customer loyalty, or a sign that the labs that need training data at this scale have nowhere else to go. Why it matters Mercor now wants to own the whole training stack: the environments where agents practise, the experts who grade them, and the benchmarks that define success. Rivals crowd in behind it, from Scale AI, worth around $29bn since Meta took a stake, to Surge AI, reportedly raising near $25bn. The market is enormous, and the money is chasing it hard, from rival environment builders to the soaring paper valuations of the labs Mercor serves. Whether $20bn is a fair price or a bubble marker, sceptics keep warning about froth across AI. Mercor's answer is growth. Its investors will have to decide whether the growth, once you strip out the contractors, the breach and the founder's own bet, is really worth twenty billion dollars. Or whether, like OpenAI's own long wait to list, the number is running ahead of the proof.

Mercor buys Deeptune to build training environments for AI agents

Mercor buys Deeptune to build training environments for AI agents Artificial intelligence training data company Mercor.io Corp. announced today that it has acquired Deeptune Inc., a startup that builds simulated software environments used to train AI agents. Financial terms were not disclosed. The deal closed nearly four months after Mercor Chief Executive Brendan Foody wrote a personal angel check into Deeptune's $43 million Series A round, which Andreessen Horowitz led in March. Foody told Fortune that the investment was made with a purchase already in mind. "It was in a lot of ways the main motivation, actually," he said. Deeptune is based in New York and builds what Chief Executive Tim Lupo calls "training gyms," reinforcement learning environments that copy the software knowledge workers use every day. An agent drops into a simulated spreadsheet or a Salesforce queue, gets the task wrong and tries again. Nothing it touches is real. Lupo has likened the setup to a flight simulator. Mercor said the team has recreated hundreds of enterprise applications over the past two years and was already supplying environments to frontier labs, with Mercor among them as a customer. Foody framed the acquisition as a bet on where the bottleneck in model training now sits. "Reinforcement learning has reached the point where a model can learn almost any task that can be clearly defined and scored," he wrote in a blog post announcing the deal. "The constraint has shifted to the environments themselves: the places where models practice the work and get measured on whether they did it well." Mercor supplies the human layer of that system. Its network of more than five million domain experts writes the tasks and the verifiers whether an agent completed them correctly and its APEX benchmarks score model performance across real-world workflows. Deeptune supplies the software those tasks run inside. The purchase lands in the middle of a fundraising push. Bloomberg reports that Mercor is in early talks to raise at a valuation of about $20 billion, double the $10 billion it commanded in October when it closed a $350 million Series C. Foody said on X that annualized revenue crossed $2 billion in June, up 100% in four months. Mercor's year has not been uniformly good. Attackers using malware planted in the open-source LiteLLM library reached the company's systems in March. Lapsus$ later claimed to hold four terabytes of Mercor data, including source code, a user database and a bucket of video and identity-verification files. The stolen data reportedly included contractor Social Security numbers, passport scans, interview recordings and facial biometrics. Contract workers have since filed suit. Foody told Fortune the incident has not cost Mercor business. "Every frontier lab has expanded their relationship with us since the data breach," he said. Lupo and the rest of Deeptune's staff are joining Mercor in New York.

Mercor valuation doubles to $20B on revenue growth - Bloomberg By Investing.com

Investing.com - Mercor, a startup that helps improve artificial intelligence models with specialized data, is discussing raising new funds at a roughly $20 billion valuation, according to reporting from Bloomberg, citing people familiar with the matter. The company has told investors that it received at least one term sheet at that valuation. The fundraising discussions are early, and the company could end up not raising a round or deal terms could change. The active fundraising talks have occurred over the past few weeks, less than a year after Mercor last raised money at a $10 billion valuation. The discussions follow a turbulent period for the firm. In late March, Mercor was the victim of a security breach that put its customers and contractors at risk. Meta Platforms Inc. (NASDAQ:META), a customer at the time, reacted to the breach by pausing its work with the startup indefinitely. Mercor said that the impacts to customer and contractor data were "very limited," according to findings from an investigation. OpenAI and Anthropic continue to be customers, according to a person familiar with the matter. Mercor Chief Executive Officer Brendan Foody said in a post on X this week that the company hit $2 billion in annualized revenue run rate, up from $1 billion just four months ago. The revenue figure doesn't reflect what Mercor's share of revenue is after it pays money to contractors, who earn 60-70% of the total amount billed, according to a person familiar with the matter. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.