Peak XV Leads $45 Mn Bet On US-Based AI Code Testing Startup Blacksmith

Peak XV Partners led a $45 million Series B funding round for San Francisco-based AI code testing startup Blacksmith, positioning it at a $550 million valuation. Existing investors Google Ventures and Y Combinator also participated in the round. This brings Blacksmith's total capital raised to $58.5 million. The startup plans to allocate a significant portion of the new funding to bolster its computing infrastructure to meet the growing demand for tools that can test and validate AI-generated code.

Blacksmith's cofounder and CEO, Aditya Jayaprakash, noted that advancements in AI coding models are enabling developers to produce more software, leading to an increased need for infrastructure to validate and test the code. The company, founded in 2024 by Jayaprakash, Aditya Maru, and Aayush Shah, initially focused on automatically testing code before deployment.

Now, Blacksmith is developing tools that allow developers and AI agents to validate and merge code more efficiently. The number of continuous integration (CI) jobs run on Blacksmith's platform has grown by 5-10% week-on-week since the start of 2026, driven by the increasing adoption of AI code generation tools. Over 6,000 companies now use Blacksmith, including Supabase, Clerk, Ashby, and Mercury.

The startup recently launched codesmith, a cloud-based coding agent capable of building features, fixing bugs, diagnosing CI failures, and automatically resolving them. Blacksmith is also developing codesmith QA, which will autonomously test code changes before they are merged. With its current infrastructure managing hundreds of thousands of CPU cores, Blacksmith plans to expand this capacity by around 10 times in the coming months.

The company competes with platforms like GitHub Actions, CircleCI, Buildkite, Depot, and Namespace. Peak XV's investment reflects the firm's push into the US market, where it has expanded its presence since separating from Sequoia Capital in 2023. The VC firm has since opened its first San Francisco office and expanded its US team to eight members.