Most startup profiles lean on a revenue number. Mercor’s is the more interesting story because the number comes with an asterisk its own CEO has spelled out. Brendan Foody, the company’s chief executive, told TechCrunch in September 2025 that Mercor’s annual recurring revenue was higher than $450 million, and that it counts the total customers pay before contractor payouts — a practice he said is common and shared by Surge AI and Scale AI. In other words: a very fast-growing business, a very large headline figure, and a much smaller slice that the company actually keeps.
That gap, and what sits on either side of it, is the reason to look closely at a company that was valued at $10 billion barely two and a half years after it was founded.
From a hackathon idea to an AI hiring tool
Mercor’s three co-founders — Foody (CEO), Adarsh Hiremath (CTO) and Surya Midha — were all 22 when Fortune profiled them in late 2025. Foody and Hiremath had competed together on high-school debate teams, and Fortune reports the idea took shape at a hackathon in São Paulo. TechCrunch describes the trio as Thiel Fellows and Georgetown and Harvard dropouts; Foody left Georgetown.
The first product was a hiring platform: software that screened résumés, matched candidates to jobs and ran AI-powered interviews, according to Fortune. Sacra, an independent research firm, describes an even earlier, manual stage — matching engineers in India with startups. Fortune reports the company reached a $1 million revenue run rate within nine months.
The pivot into training data
The consequential turn was from placing workers with ordinary employers to supplying specialists to AI labs. TechCrunch’s October 2025 funding story describes the company as having started as an AI-driven hiring platform and then pivoted to providing domain experts — scientists, doctors and lawyers — to train AI models, earning an hourly finder’s fee and matching rate on their work. Customers, per the reporting we reviewed, include the large AI labs.
Timing helped. TechCrunch tied Mercor’s growth to reports that OpenAI and Google DeepMind cut ties with Scale AI after Meta’s $14 billion investment in that company. Sources disagree on the exact dates and triggers of Mercor’s own pivot, so we won’t pin one down.
The money followed fast. In February 2025 Mercor announced a $100 million Series B at a $2 billion valuation, led by Felicis. TechCrunch reported annualised revenue (latest month times twelve) of $75 million that February and, by Foody’s own post on X, $100 million in March. In October 2025, Mercor raised a $350 million Series C at $10 billion — five times the Series B valuation — again led by Felicis, with Benchmark, General Catalyst and Robinhood Ventures participating. At that point TechCrunch reported Mercor paid more than $1.5 million a day to contractors, with over 30,000 experts on its roster earning more than $85 an hour on average. Forbes, as cited by TechCrunch, reported $6 million of profit in the first half of 2025.
Reading the revenue number honestly
Because Mercor passes most of what customers pay straight on to the people doing the work, “run rate” and “revenue” are not the same thing. Foody said so himself when he defended the figure. Third-party estimates of the split vary and are not company-confirmed — one research summary puts contractor payouts at 60–70% of top-line revenue — so treat any net-revenue figure as an estimate, not a fact. What the public record firmly supports is the shape: a marketplace business with very fast gross growth, thin margins relative to that gross number, and customers concentrated among a handful of AI labs.
Three pressures on the model
A trade-secrets lawsuit. In September 2025, Scale AI sued Mercor and a former Scale employee, alleging the employee took more than 100 confidential documents about Scale’s customer strategies. Coverage from TechCrunch, Axios and Bloomberg Law reports the same core allegation. Co-founder Surya Midha has said Mercor did not use any Scale data, while acknowledging the former employee may have had some files and saying Mercor offered to have them destroyed. These are allegations in a pending civil case, not findings. We found no later ruling or settlement and did not check the court docket.
A security incident. In April 2026, WIRED reported that Meta paused its work with Mercor after a data breach that put AI-industry training secrets at risk; the breach was reported as tied to a supply-chain compromise of a widely used AI developer tool. We could not open the original WIRED article, so we rely on follow-up coverage here and have not repeated unverified claims about how much data was taken. TechCrunch later noted that Mercor faced multiple lawsuits over the breach, citing HR Dive.
A moving valuation. In July 2026, TechCrunch, citing Bloomberg, reported Mercor was in early talks to raise at a $20 billion valuation, and that Mercor would acquire Deeptune, a company building training environments for AI agents. Both items are reports of talks and an announced acquisition; we have not confirmed a closed round.
What founders can take from it
First, a pivot can be a move toward where the buyers’ budgets already are. Mercor’s customers were AI labs with enormous, urgent demand for expert human judgement, and the company repositioned itself to meet it. Second, define your metrics before someone else does: Foody was upfront that his headline number was gross, and that candour is what lets a reader weigh it correctly. Third, concentration cuts both ways. A business built on a few giant customers can scale at record speed — and can be shaken when one of them pauses work.
A caveat on all of it: much of the company-level detail above is reported by third parties relying on figures the company shared, several of Mercor’s numbers are self-reported run rates, and the 2026 developments are recent and still unfolding.
This is an editorial profile assembled from the public record, not an interview. Sources: TechCrunch — Mercor quintuples valuation to $10B with $350M Series C (Oct. 2025), TechCrunch — Mercor founders and Scale AI lawsuit coverage (Sept. 9, 2025), Fortune — the founders of Mercor (Nov. 2025), Axios — Scale AI sues rival “unicorn” Mercor (Sept. 3, 2025), TechCrunch Equity podcast summary (Jan. 2, 2026), Sacra — Mercor.
