Scale AI Nears $13 Billion Valuation in Accel-Led Round
Venture capital firm Accel, an early investor in the data labeling startup Scale AI, is in talks to lead a new round of funding that would raise the startup’s valuation nearly 80% to about $13 billion, people with direct knowledge of the discussions said.
The investment would allow Accel to maintain a large share of a valuable startup that has gotten a boost selling services to OpenAI and other conversational AI startups. Scale, which labels images or text for artificial intelligence models, is in talks to raise hundreds of millions of dollars in the round, one of the people said.
The Takeaway
• Fundraising follows revenue growth of 150%
• Startup has benefited from generative AI
• Accel is an early investor
The round isn't yet finalized and terms could change. A spokesperson for Accel declined to comment. A representative for Scale didn’t return a request for comment.
The round would follow a growth streak for Scale. It got its start eight years ago selling its services to autonomous vehicle companies, and more recently benefited from the generative AI boom. Scale generated more than $675 million in revenue last year, up about 150% from the previous year, The Information previously reported.
The growth emboldened its 27-year-old founder, Alexandr Wang, to seek a new round of funding that would increase the startup’s valuation from 2021, when investors valued it at $7.3 billion including investments. Over the last few months, venture capital firms and mutual funds explored investing in the firm, ahead of a potential IPO in the coming years. It’s not clear what other investors are involved in the round.
Accel first invested in Scale’s Series A round in 2016. The Palo Alto, Calif.,-based VC firm hasn’t invested in some of the most highly valued startups leading the chatbot craze—the model developers OpenAI and Anthropic. It is more interested in “picks and shovels” businesses like Scale, said Rich Wong, a partner at Accel, on a subscriber video call with The Information on Tuesday.
“It’s the data engine that sits behind a lot of the models for the foundational players as well as people trying to tune it for their vertical apps,” Wong said. He added: “We think there will be much more than the big-five models that will become important customers.”
Other Scale investors include Founders Fund, Index Ventures, Spark Capital and Thrive Capital.