Micro1, an emerging competitor to Scale AI, is in the final stages of raising a Series A funding round that would value the startup at $500 million, according to sources familiar with the deal. The round is expected to include investments from notable venture firms 01A and LG Technology Ventures, with former Twitter COO Adam Bain recently joining Micro1’s board.
Disrupting the Data Labelling Space with AI-Driven Hiring
Micro1 provides data annotation and labelling services to leading AI labs—an essential function in the development of large-scale AI models. However, instead of relying on large pools of low-cost manual labour, the startup leverages an AI-powered recruitment engine that matches specialised, high-quality talent to specific project needs, setting it apart in a traditionally commoditised industry.
This innovative approach appears to be paying off. According to sources:
- Annualised revenue has surged from $10 million to $50 million in just a few months.
- The company is on track to surpass $100 million in annualised revenue by the end of September 2025.
Benefiting from Scale AI’s Leadership Shake-Up
Micro1’s momentum comes amid turmoil at Scale AI, one of the sector’s most established players. The departure of Scale’s CEO, Alexandr Wang, to head Meta’s new Superintelligence Labs, has reportedly triggered an exodus of customers due to conflict-of-interest concerns.
Key clients including Google and OpenAI are said to be distancing themselves from Scale, worried that continued collaboration could compromise the confidentiality of their research pipelines, given Meta’s competitive position in the AI race.
Competitive Landscape Heats Up
The data labelling market is seeing intensified activity:
- Surge AI, another major Scale competitor, is also raising capital and reportedly generated over $1 billion in revenue last year.
- The market for trusted, secure, and high-quality training data is rapidly expanding alongside the generative AI boom, with startups like Micro1 positioned to capitalise on shifting customer loyalties and evolving expectations.
With fresh capital and a differentiated talent-centric model, Micro1 appears poised to reshape how data annotation is done in the AI era.
