AI data startup Snorkel AI has raised $350 million in a Series E funding round, bringing the company's valuation to $3.5 billion.
The round was led by Insight Partners and S32, with existing investors including Addition, Lightspeed, Greylock, GV, and Wells Fargo also participating.
The latest funding marks a significant jump from Snorkel AI's previous valuation. The company was valued at approximately $1.3 billion when it raised $100 million in its Series D round 17 months ago.
From Data Labeling to Data-as-a-Service
Snorkel AI originally focused on automating data labeling for machine learning applications.
The company has since expanded its business model. Last year, Snorkel shifted toward providing customers with completed datasets and reinforcement learning environments through what it describes as a data-as-a-service offering.
Rather than relying entirely on human experts, Snorkel combines software, AI models, synthetic data generation, and subject-matter specialists to build datasets for AI development.
This hybrid approach allows the company to produce specialized training data while using automation to support the process.
Revenue Growth Driven by AI Demand
Snorkel says its current annualized revenue run rate has reached $375 million, representing an eighteenfold increase over the past 12 months.
The growth reflects the increasing demand from AI labs and companies for high-quality training data.
Snorkel isn't the only company benefiting from this trend.
Other AI data businesses have also reported rapid growth. Mercor's gross annualized revenue has reached $2 billion, while Handshake crossed the $1 billion milestone earlier this year. AI data startup Micro1 has also reportedly reached a $500 million gross annualized revenue run rate.
However, these headline figures need some context.
Many AI data companies pay a significant portion of their revenue directly to domain experts who perform the underlying work. In some cases, that can account for roughly 60% to 70% of top-line revenue, meaning their net revenue can be considerably lower than reported gross figures.
A Different Business Model
Snorkel's model differs because the company sells completed datasets and reinforcement learning environments rather than primarily selling access to human labor.
According to Snorkel, payments to its human experts are treated as part of its cost of goods sold, rather than being deducted from the annualized revenue figures it reports.
A Growing AI Data Market
Snorkel AI launched commercially in 2019, following four years of research led by co-founder and CEO Alex Ratner and his team at a Stanford AI lab.
The company's latest funding highlights how valuable high-quality training data has become as AI models continue to scale.
As AI labs and enterprises build increasingly sophisticated models, the demand is moving beyond simply having more data. Companies are looking for specialized, high-quality datasets and realistic environments that can help models perform better in specific domains.
Snorkel's latest funding round reflects the growing investment in that part of the AI infrastructure stack.