- On August 7, machine learning startup Scale AI announced it raised $100 million in Series C funding from some of Silicon Valley’s top investors. The round valued the 3-year-old startup at $1 billion.
- Scale AI’s 22-year-old founder Alexandr Wang told Business Insider that he wants the data labeling startup to become the infrastructure for machine learning technology, similar to what Amazon Web Services did for cloud computing.
- The New Mexico-native dropped out of MIT after only a year to build the company and would have graduated with his class this summer if he had stayed.
- Wang said that one time an investor introduced him to pop singer Katy Perry in an effort to impress him while he was fundraising.
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Instead of walking across the stage at his graduation ceremony this summer, Alexandr Wang celebrated a bigger milestone: His 3-year-company, Scale AI, had successfully raised $100 million in funding and was officially worth $1 billion.
Wang’s startup, which focuses on the seemingly-mundane business of data labeling, has caught the attention of some of Silicon Valley’s biggest names, including early-stage firm Accel and Twitch cofounder Justin Kan. On August 7, Wang deepened his investor bench with the $100 million Series C, which was led by Peter Thiel’s venture firm Founders Fund and included industry heavyweights Spark Capital, Thrive Capital, and Instagram cofounder Kevin Systrom.
The flood of investor interest is because Wang’s data labeling service is effectively a bridge into the realm of artificial intelligence; without it, many businesses will be stuck on the wrong side of a major technological shift.
For Wang, getting crowned with a $1 billion "unicorn" valuation is an important symbolic moment.
"While funding rounds valuations are not the goal, they are true milestones that sort of demonstrate, ‘Hey, all the great work that everyone’s been doing has been paying off,’" Wang told Business Insider.
Read More: Silicon Valley’s most famous startup accelerator has a lot of participants who have already done the program. Tech founders share why they rejoined Y Combinator even after launching successful startups.
Scale AI is the result of Wang’s side projects during his one-year stint at MIT. The New Mexico-native realized that many data-rich companies weren’t able to properly use the data at their disposable because it hadn’t been accurately curated for machine learning applications. Three years later, Scale AI provides data labeling services for clients in a range of industries that includes everything from autonomous vehicles to medical imaging.
"We really, really look up to [Amazon Web Services] because I think they did exactly what we aspire to do," Wang said. They started with a few problems that were really painful. But the thing that’s crazy is that basically AI and machine learning are moving so quickly as technologies."
In it for the long haul
As machine learning and artificial intelligence technologies gain steam across industries, the race is on among startups hoping to become the "AWS of machine learning," as Wang described it.
"It’s really critical that we’re able to power these industries really safely in a non-biased way," Wang said. "I think it’s kind of a forever challenge in the sense that we’ll always be pushing ourselves to get better. I don’t think anybody could ever have expected this sort of like level of investment and adoption of machine learning that we’re seeing right now."
To keep up with the growth throughout the industry, not to mention investor expectations, Wang has had to rapidly hire specialized machine learning engineers, a task that has proven difficult for even the largest technology companies in Silicon Valley.
"The big companies aren’t helping, but machine learning is a skill that’s in such high demand right now. It makes hiring very difficult," Wang said.
Wang said his 100-person team operates "close to break even or even profitable" across three offices in Germany and San Francisco. He told Business Insider that he is planning on moving the team to a new office in San Francisco, where the team is currently split across two offices because of the rapid growth it has experienced. As the startup grew, investors started courting Wang to hopefully back his business.
"I got to meet Katy Perry. I was like, yes, yeah, definitely Instagram that," Wang said, recalling an introduction to the pop star arranged by a VC seeking to curry favor.
But now that the dust has settled and the funds are in the bank, Wang is excited to get back to work building the next major infrastructure tool for machine learning technology and leading his growing team.
"I’m in it for the long haul. I certainly think that the best companies in the world are led by their founders," Wang said. "I mean, the people in Silicon Valley are so adaptable. That’s part of what makes Silicon Valley great, right?"
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