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Snorkel AI triples valuation to $3.5B as demand for AI training data booms
Snorkel AI has tripled its valuation to $3.5 billion after raising $350 million in Series E funding, driven by high demand for training datasets in the AI sector. The startup, which transformed its business model to data-as-a-service, reported an annualized revenue run-rate of $375 million, up from prior figures, as other AI data companies also experience significant growth.
Key points
- Snorkel AI raised $350 million in Series E funding.
- Valuation increased from $1.3 billion to $3.5 billion in 17 months.
- Notable investors include Insight Partners, S32, Addition, Lightspeed, Greylock, GV, and Wells Fargo.
- Transitioned from data labeling automation to data-as-a-service offering completed datasets.
- Annualized revenue run-rate is now $375 million, an 18-fold increase over the past year.
- Other data companies like Mercor, Handshake, and Micro1 are experiencing similar revenue growth, indicating a trend.
- Payments to domain specialists are significant but reported as cost, affecting net revenue perception.
Why it matters
- The growth in AI data companies reflects the booming demand for AI training data, a significant 2025 IT trend.
- The shift to data-as-a-service aligns with evolving business models in tech, focusing on high-quality datasets over human labor.
- Previously, AI companies struggled with sourcing reliable training data, impacting the development of AI models.
Snorkel AI's rapid valuation growth and shift to data-as-a-service illustrate the increasing importance of quality training data in AI development, aligning with broader IT trends in 2025.