Snorkel AI reaches $3.5 billion valuation amid demand for AI training data

Snorkel AI, a startup that creates training datasets for AI laboratories and companies, raised $350 million in a Series E round led by Insight Partners and S32, bringing its valuation to $3.5 billion.

Series E Funding Round and Valuation Increase

The seven-year-old startup nearly tripled its $1.3 billion valuation from its $100 million Series D round held 17 months ago with this new investment.

The $350 million investment round, managed by Insight Partners and S32, saw participation from existing investors including Addition, Lightspeed, Greylock, GV, and Wells Fargo.

Service Model and Data Generation Approach

Initially offering software for data labeling automation, the startup transitioned last year to a model it calls data-as-a-service, providing ready-made datasets to customers.

Instead of operating solely as a human expert marketplace, the company adopts a hybrid approach that generates synthetic data using AI software and models alongside domain experts.

Revenue Growth and Industry Background

The intense demand from AI laboratories for quality training data allowed the company's annual recurring revenue rate to increase 18-fold over the past 12 months, reaching $375 million.

Founded as a result of research by Alex Ratner and his team at the Stanford AI lab, the company began commercial operations in 2019.