Micro1, a three-year-old startup that helps AI companies find and manage human contractors for data labeling and training, has raised a $35 million Series A round, valuing the company at $500 million. The round was led by O1 Advisors, a venture capital firm co-founded by Dick Costolo and Adam Bain, former CEO and COO of Twitter.
The startup is one of a number of companies looking to fill a gap in the data market created by recent changes to scale AI. After Meta invested $14 billion in AI and hired its CEO, AI labs including Openai and Google said they planned to cut ties with the startup, apparently mistaking concerns that their research could end up in Meta’s hands. (Scale AI denies that it shares confidential information with Meta as part of its partnership.)
However, AI labs still need these data services, and companies like Micro1 aim to pick up the slack.
Micro1 CEO Ali Ansari — who is just 24 years old — tells TechCrunch that his company is working with leading AI labs, including Microsoft, as well as several Fortune 100 companies. Ansari said Micro1 is now generating $50 million in annual recurring revenue (ARR), up from $7 million in early 2025.
That’s still a long way from larger competitors like Mercor, which is generating over $450 million in ARR, and Boom, which is reportedly set to bring in $1.2 billion in revenue by 2024. However, Micro1’s growth and adoption in AI labs appears to be growing at a healthy pace.
As part of the new funding, Micro1 is also adding Bain to its board of directors alongside Joshua Browder, founder and CEO of AI legal assistant Donotpay.
“Really, the only way models can learn now is with new net data.
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Reuters previously reported information from Micro1’s fundraising efforts.
All of these companies — Micro1, Surge, Mercor, and Scale AI — provide AI labs with access to a large pool of human contractors who can label and generate data for AI training. This has become an essential service that companies like Openai, Anthropic, Meta, and Google need to build cutting-edge AI models.
Scale AI first dominated the space with the initial insight that it could pay relatively little to hire low-skilled contractors around the world to help label data for AI model training. However, Ansari says that AI Labs’ requirements have changed in recent years, and that companies now need high-quality data labeling from domain experts—like senior software engineers, doctors, and professional writers—to improve their AI models. The hard part has become getting those kinds of people.
That led Micro1 to build its own AI recruiter, Zara, which interviews and vets candidates who apply to work as one of the company’s contractors, or as Ansari calls them, experts. Micro1 says Zara has hired thousands of experts — including Stanford and Harvard professors — and that the company plans to add hundreds more every week.
The market for AI training data appears to be changing again. Many AI labs are now interested in partnering with startups to develop “environments” — virtual workspaces that can be used to train AI agents with simulated tasks. Ansari says Micro1 is building new offerings in the environment space to meet this demand.
Fortunately for startups like Micro1, AI Labs appears to be working with multiple training data providers. The nature of the business is such that it’s difficult for any one company to handle all of an AI lab’s needs. That means there’s plenty of business to go around, at least for now.
