Weekly AI Startup Funding: October 26 - November 1, 2025

AI startups raised over $1.8 billion this week across data labeling, enterprise AI infrastructure, video generation, and legal tech innovation. From Mercor’s stunning $10 billion valuation to Europe’s legal tech breakthrough, capital flowed to companies solving critical AI training bottlenecks and vertical market inefficiencies. Here are the highlights:

Mercor Quintuples Valuation to $10 Billion with $350 Million Series C

Fund Raised: $350 million

Valuation: $10 billion

Investors: Felicis Ventures (lead), Benchmark, General Catalyst, Robinhood Ventures

San Francisco-based Mercor closed a blockbuster $350 million Series C round, quintupling its valuation from $2 billion just eight months after its February 2025 Series B. The company has transformed from an AI-powered hiring platform into critical infrastructure for training foundation models, connecting AI labs with 30,000+ domain experts who collectively earn over $1.5 million daily.

Founded by three Thiel Fellows—Brendan Foody (CEO), Adarsh Hiremath, and Surya Midha—Mercor initially built technology to analyze candidate resumes and transcripts. The pivot came when founders realized they’d accidentally assembled a vast network of highly specialized professionals across science, medicine, law, and engineering.

Mercor now manages reinforcement learning from human feedback (RLHF) at unprecedented scale, providing the human-in-the-loop training that frontier AI labs require.

Explosive growth metrics:

• $500 million ARR as of September 2025 (on track to hit faster than Cursor)
• 30,000+ contractors earning average $85/hour
• Zero enterprise churn
• Profitable operations

Mercor’s fortunes soared after Meta invested $14.3 billion for a 49% stake in Scale AI, causing Scale’s CEO to step down and join Meta. Major labs including Google and OpenAI reportedly cut ties with Scale over neutrality concerns, creating massive opportunity for an independent alternative.

The funding will expand the global talent network, advance AI-powered expert matching systems, and accelerate delivery speed. Felicis partner Sundeep Peechu noted: “Mercor crossed a $500 million revenue run rate this September and is profitable, with zero enterprise churn. We at Felicis are thrilled to invest in their Series C because they are building the next generational platform technology company.”

Fireworks AI Raises $250 Million Series C to Lead AI Inference Market

Fund Raised: $250 million

Valuation: $4 billion

Total Funding: $327 million

Investors: Lightspeed Venture Partners (co-lead), Index Ventures (co-lead), Evantic (co-lead), Sequoia Capital, NVIDIA, AMD, Databricks

Redwood City-based Fireworks AI secured $250 million in Series C funding at a $4 billion valuation, positioning the company to dominate enterprise AI inference infrastructure. Founded by the PyTorch team from Meta—including CEO Lin Qiao—Fireworks has scaled to process over 10 trillion tokens daily for 10,000+ customers in 2025.

The round includes $230 million in primary financing and $20 million in secondary offerings, reflecting both growth capital and liquidity for early employees and investors. The investment arrives as the AI industry pivots from training-focused infrastructure to inference optimization—where trained models make real-time predictions in production environments.

While competitors provide black-box API access to models, Fireworks arms developers with hundreds of cutting-edge open-source models across text, image, audio, and multimodal domains. The platform offers fine-tuning capabilities ranging from simple supervised learning to advanced reinforcement learning—tools previously guarded by frontier labs.

Technical superiority:

• Processing 10+ trillion tokens daily
• $280 million ARR as of May 2025 (up from $6.5 million year prior)
• Sub-second inference at scale
• 40% latency reduction vs. alternatives
• Up to 60% cost savings for customers

Major customers: Uber, Shopify, DoorDash, Genspark, Retell AI, GitLab, Cursor

The company recently launched Eval Protocol, the first systematic attempt to standardize model evaluation, and application-tailored tuning tools that let developers apply the same reinforcement learning techniques used by frontier labs.

The funding will support global expansion, algorithm research, infrastructure scaling (3-4x capacity increase), and hiring across engineering, product, and GTM teams. CEO Qiao told the Wall Street Journal the company will hire 150+ AI researchers and engineers while purchasing additional GPUs for its cloud platform.

Synthesia Doubles Valuation to $4 Billion with $200 Million Round

Fund Raised: $200 million

Valuation: $4 billion

Total Funding: $536 million

Investor: GV (Google Ventures) (lead), with participation from NEA, Kleiner Perkins, Accel, NVIDIA, Adobe

London-based Synthesia raised $200 million in Series E funding led by GV, nearly doubling its valuation from $2.1 billion just nine months after its January 2025 Series D. The AI video generation platform has established dominance in enterprise avatar-based video creation, serving 60,000+ customers, including 90% of Fortune 100 companies.

Founded in 2017 by researchers from University College London, Stanford, and Cambridge, Synthesia enables businesses to create professional videos featuring lifelike AI avatars speaking in 140+ languages. Users simply input text scripts, select avatars, and the system generates broadcast-quality videos—no cameras, studios, or actors required.

Remarkable traction:

• $150 million+ ARR (crossed $100M ARR milestone in August 2025 after just 36 months)
• $2 million revenue in a single day (October 2025)
• 60,000+ customers globally
• 90% of Fortune 100 adoption

Enterprise clients: Zoom, Heineken, Bosch, DuPont, Xerox, Spirit Airlines

While consumer-focused competitors like OpenAI’s Sora and HeyGen target viral content creation, Synthesia carved out enterprise communications—corporate training, internal updates, employee onboarding, and product demos. This focus on brand consistency, multilingual capability, and realistic presentation differentiates the platform.

The funding will expand product capabilities beyond training into marketing, advertising, and external communications, building toward a comprehensive business video platform. The company recently hired Peter Hill as CTO—a 25-year Amazon veteran who led technical divisions at scale.

In early October, reports surfaced that Adobe offered $3 billion to acquire Synthesia. CEO Victor Riparbelli declined. At a $4 billion valuation weeks later, that rejection appears prescient—assuming the company sustains growth momentum.

GV’s leadership in the round signals Alphabet’s continued commitment to enterprise AI applications, following the venture arm’s pattern of backing category-defining vertical AI companies.

Legora Secures $150 Million to Transform Legal AI in Europe

Fund Raised: $150 million

Valuation: $1.8 billion

Investors: Bessemer Venture Partners (lead), ICONIQ, General Catalyst, Redpoint Ventures, Benchmark, Y Combinator

Sweden-based Legora (formerly Leya) raised $150 million in Series C funding at a $1.8 billion valuation, marking one of Europe’s largest legal tech financings to date. The Stockholm-founded startup provides AI-powered research, drafting, and collaboration tools for law firms and corporate legal departments.

Founded in 2023 by Max Junestrand and Sigge Labor out of the Stockholm School of Economics’ Business Lab incubator, Legora has built a platform that automates tedious legal work without removing lawyers from strategic decision-making. The company serves over 400 law firms across 40 markets from offices in Stockholm, London, and New York.

Explosive growth:

• Customer base grew from 250 to 400+ law firms in six months
• Geographic markets doubled from 20 to 40
• Employs 100+ people across three continents

The funding will support global expansion, product development, and hiring across geographies. The round comes as legal tech hits all-time highs in venture funding, driven by AI-powered automation that promises to eliminate manual drudgery while keeping attorneys focused on higher-value strategy and client relationships.

Bessemer partner’s involvement reflects the firm’s conviction in vertical AI applications that solve specific professional workflows. The legal sector represents a massive opportunity—law firms globally generate over $800 billion in annual revenue, with much of that spent on document review, research, and drafting tasks that AI can now handle efficiently.

Legora competes with US-based Harvey (recently valued at $3 billion) and other legal AI platforms, but differentiates through its European regulatory expertise and multilingual capabilities. The company was previously known as Leya before rebranding in early 2025 during its US expansion push.

Poolside in Talks for $2 Billion Round Led by NVIDIA

Fund Raised: Up to $2 billion (in discussion)

Valuation: ~$12 billion (pre-money)

Lead Investor: NVIDIA ($500M committed upfront, potentially $1B total)

French AI coding startup Poolside is in advanced discussions to raise up to $2 billion at a pre-money valuation near $12 billion, with NVIDIA committing $500 million upfront and potentially $1 billion total depending on round structure. The deal would represent one of the largest single private investments in an AI startup this year.

Founded in 2023 by Jason Warner (former GitHub CTO) and Eiso Kant, Poolside builds AI assistants that help engineers generate code, debug projects, and automate repetitive development tasks. The company positions itself as an “AI pair programmer” that helps developers design, test, and deploy applications faster.

The platform provides natural language interfaces for code generation, explanation, and optimization. Developers describe what they want to build, and Poolside’s AI writes, explains, and optimizes the implementation—dramatically accelerating development cycles.

NVIDIA’s massive commitment reflects the chip giant’s strategy of backing companies that drive AI adoption and, consequently, GPU demand. The investment would follow NVIDIA’s pattern of strategic bets across the AI stack, from infrastructure (Crusoe, CoreWeave) to applications (Poolside, Harvey).

The size and structure of the deal highlight how AI infrastructure and platform companies are commanding blockbuster funding. Sequoia Capital described similar investments as bets on new computing interfaces—voice, code generation, and conversational AI represent the next evolution beyond typing and tapping.

If completed, the round would cement Poolside’s position as a major player in the increasingly competitive “AI for software engineering” market, alongside GitHub Copilot, Cursor (which recently hit $500M ARR), Replit, and others reshaping how code gets written.

Other Notable Rounds

The Prompting Company Raises $6.5 Million Seed

Fund Raised: $6.5 million

Stage: Seed

Investors: General Catalyst (lead)

New York-based The Prompting Company secured $6.5 million in seed funding to help brands get discovered inside AI chat interfaces. As consumers increasingly use ChatGPT, Claude, and Perplexity to research products, brands need strategies to appear in AI-generated recommendations. The Prompting Company is building tools that help companies optimize their presence in LLM outputs.

Graph AI Secures $3 Million Seed

Fund Raised: $3 million

Stage: Seed

Location: Boston, MA

Boston-based Graph AI raised $3 million in seed funding to automate global drug-safety monitoring for pharmaceutical companies. The platform uses AI to process adverse event reports, clinical trial data, and real-world evidence at scale, helping pharma companies meet regulatory requirements while identifying safety signals faster.

Archy Raises $20 Million Series B

Fund Raised: $20 million

Stage: Series B

Dental practice management platform Archy secured $20 million in Series B funding to automate clinical operations. The platform combines practice management software with AI-powered patient communication, scheduling optimization, and billing automation—reducing administrative burden on dental practices.

SalarySe Closes $11.3 Million Series A

Fund Raised: $11.3 million

Stage: Series A

Location: India

India-based SalarySe raised $11.3 million in Series A funding to power salary-linked financial products. The fintech platform partners with employers to offer employees access to earned wages, credit, insurance, and other financial services linked to their salary accounts.

IntrCity SmartBus Secures ₹250 Crore ($28 Million)

Fund Raised: ₹250 crore (~$28 million)

Location: India

Indian intercity bus operator IntrCity SmartBus raised ₹250 crore to expand its premium intercity travel network. The company operates tech-enabled bus services connecting tier-2 and tier-3 cities, targeting India’s growing middle class seeking comfortable, reliable travel options.

PointAI Raises ₹47 Crore ($5.7 Million) Seed

Fund Raised: ₹47 crore (~$5.7 million)

Stage: Seed

Location: India

Bangalore-based PointAI secured ₹47 crore in seed funding to accelerate its deep-tech AI expansion. The company builds AI infrastructure for Indian enterprises, focusing on language models optimized for Indic languages and cultural contexts.

Catalyx Space Closes $5.4 Million Seed

Fund Raised: $5.4 Million

Stage: Seed

Space tech startup Catalyx Space raised $5.4 million in seed funding to commercialize orbital re-entry systems. The company is developing technology that enables spacecraft and satellites to safely return to Earth, addressing the growing need for reusable space infrastructure.

Jupiter Money Raises ₹115 Crore ($14 Million)

Fund Raised: ₹115 crore (~$14 million)

Location: India

India-based Jupiter Money added ₹115 crore in funding to scale its digital banking platform. The neobank offers savings accounts, payments, investments, and credit products through a mobile-first interface, targeting millennials and Gen Z customers.

International Spotlight

Europe: Legora’s $150 million Series C at $1.8 billion valuation marks one of Europe’s largest legal tech rounds, demonstrating the region’s strength in vertical AI applications and regulated industries.

India: Strong activity in fintech and infrastructure with SalarySe ($11.3M), IntrCity SmartBus ($28M), PointAI ($5.7M), and Jupiter Money ($14M) raising significant rounds, reflecting India’s continued emergence as a major startup ecosystem.

France: Poolside’s potential $2 billion raise would cement Paris-based startup’s position among the most valuable AI coding platforms globally, following France’s Mistral AI as another European AI winner.

Important Takeaway

This week’s $1.8+ billion in funding demonstrates AI’s evolution from foundation model development to specialized infrastructure and vertical applications. The pattern reveals three key themes:

1. Human-in-the-loop infrastructure is critical: Mercor’s $10 billion valuation validates that AI training requires high-quality human expertise at scale. As models grow more sophisticated, the bottleneck shifts from compute to data quality and expert feedback. Companies providing this layer are achieving massive valuations.

2. Inference infrastructure commands premium multiples: Fireworks AI’s $4 billion valuation at $280M ARR reflects market recognition that inference—not training—represents the next major infrastructure opportunity. As companies deploy AI in production, fast, cost-effective inference becomes mission-critical.

3. Vertical AI applications are maturing: From legal (Legora, $1.8B valuation) to video (Synthesia, $4B), specialized AI solutions for specific industries are achieving unicorn status by solving concrete business problems with measurable ROI. The “AI for everything” approach is giving way to deep vertical expertise.

The week also highlighted geographic diversification, with substantial rounds across the US, Europe, India, and emerging markets—signaling AI’s transformation from a Silicon Valley phenomenon to a global investment category.

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