Startup OpenRouter Fields Multibillion-Dollar Takeover Interest
The Takeaway
- OpenRouter fields multibillion dollar takeover interest.
- Annualized revenue reached $50 million in April, up five-fold.
- Platform helps developers manage AI costs with 400+ models.
OpenRouter, which helps app developers access hundreds of AI models, has discussed a potential sale to a bigger tech company that could value the startup at billions of dollars, a steep premium to its $1.3 billion valuation, people familiar with the matter said.
The discussions reflect a swell of interest this year in technology that makes it easier for app developers to run a variety of models, including open-source, to save costs. OpenRouter, founded three years ago, has seen business surge this year as token costs and model usage spiked.
The potential buyers couldn’t be learned. The talks follow OpenRouter’s announcement in May that it had raised $113 million in a funding round led by Alphabet’s CapitalG, a venture arm of Google parent Alphabet. (OpenRouter has also been backed by investors including Andreessen Horowitz and Menlo Ventures.) The founders of OpenRouter didn’t return requests for comment.
OpenRouter is riding fast-growing interest among businesses in using multiple AI models rather than relying only on the latest, most expensive models from big companies such as Anthropic and OpenAI. The idea is to route some tasks to cheaper or more focused models, including open source AI, to reduce costs amid surging AI bills.
That’s become a bigger priority for businesses as of late, as some have blown through their annual AI budgets in just a few months thanks to the high costs of frontier models.
Founded in 2023, OpenRouter offers an application programming interface, or API, through which developers can access more than 400 proprietary and open source models from OpenAI, Anthropic, Google and others.
The company was generating $50 million in annualized revenue as of April, up five-fold since October, when it was included in The Information’s Most Promising Startups list. Sales have likely grown rapidly since then, especially as businesses turn to cheaper open-source AI like DeepSeek and GLM.
Since the beginning of this year, the number of tokens that OpenRouter has processed through its API has grown by a factor of ten, to more than 60 trillion tokens, according to the company. It makes money from charging a small fee when developers buy credits to run AI models on its platform.
A sale would make a quick exit for its founders including co-founder and CEO Alex Atallah. He previously co-founded OpenSea, the marketplace for digital collectibles known as NFTs. Its valuation hit $13 billion hit early 2022 before the post-pandemic crypto crash caused some investors to heavily mark down their stakes.