Snorkel AI triples valuation to $3.5B with $350M Series E

Snorkel AI, a startup that helps AI labs and corporations build training datasets and simulated environments, has raised a $350 million Series E at a $3.5 billion valuation. The round was led by Insight Partners and S32, with existing investors including Addition, Lightspeed, Greylock, GV and Wells Fargo also participating.

Valuation nearly triples in 17 months

The funding values the seven-year-old company at nearly three times the $1.3 billion valuation it received when it raised a $100 million Series D 17 months ago. The round lands amid a surge in demand for high-end training data from AI labs.

From labeling software to finished datasets

Snorkel originally sold software for automating data labeling. Last year it shifted to supplying customers with completed datasets — an offering it calls data-as-a-service. Instead of operating purely as a marketplace of human experts, the company uses a hybrid approach: its software and models generate data synthetically, while subject matter experts work alongside that pipeline.

The company says its annualized revenue run-rate now stands at $375 million, an 18-fold increase over the last 12 months. Because Snorkel sells reinforcement learning environments and complete datasets rather than human labor, payments to its human experts are accounted for in its cost of goods sold rather than in the headline annualized revenue figure, according to the company.

Rivals growing just as fast

Other data companies positioning themselves as AI data labs have seen a similar explosion in growth. Mercor's gross annualized revenue has climbed to $2 billion, Handshake hit the $1 billion milestone earlier this year, and Micro1 has scaled to $500 million. Those headline numbers are gross: such companies typically pay out roughly 60% to 70% of their top-line income to the domain specialists doing the work, so their actual net annual revenue is substantially lower.

Snorkel launched commercially in 2019, following four years of research by co-founder and CEO Alex Ratner and his team at a Stanford AI lab.