Exclusive: AI code-testing startup Blacksmith hits $1 billion valuation as AI-written code surges

AI code-testing startup Blacksmith has reportedly reached a $1 billion valuation after securing a $66 million funding injection from Sequoia Capital. This is Blacksmith's Series C round, following a $45 million Series B round led by Peak XV Partners, which valued the company at $550 million. The total funding now stands at around $124.5 million.

Blacksmith claims over 10,000 companies utilize its platform, a significant growth from 5,000 in August. Notable startup clients include Granola, Handshake, Supabase, and LangChain. The company's validation checks have surged from 5 million weekly to 90 million. Annual recurring revenue has multiplied 17 times over the comparable period, according to co-founder and CEO Aditya Jayaprakash, who cited revenue in the tens of millions.

The bulk of the new funds will be used to acquire additional computing resources. Blacksmith currently employs about 40 people in San Francisco and New York, with plans to reach 75 by year-end. The company was established in 2024 by Jayaprakash, offering continuous integration (CI) - automated builds and tests necessary before code can be merged into an existing codebase and deployed.

Typically, companies rent servers from AWS, Google Cloud, or Microsoft Azure for these jobs. Blacksmith, however, owns its own machines, tens of thousands of them in data centers globally, and has developed its own software to manage them. The recent bottleneck is validating all this code, as AI coding tools like Cursor, OpenAI's Codex, and Anthropic's Claude Code have made the initial development phase much simpler.

Jayaprakash noted that Anthropic experienced a 25-fold increase in validation workloads for its Claude model in six months. Blacksmith owns much of its hardware to maintain control over performance but faces the industry-wide shortage of compute and memory. As AI models evolve, capacity planning becomes increasingly challenging due to the surge in demand following the release of stronger models.

Recently, Anthropic's Claude Fable 5 launch led to a 40% increase in Blacksmith's CI volume. Competing AI coding startups might eventually manage code validation themselves, given their focus on coding products. However, Jayaprakash argues that Blacksmith's role remains complementary due to the increase in code requiring validation.