Blacksmith Raises $66M Series C Led by Sequoia, Hits $1B Valuation as AI-Written Code Surges

Blacksmith, a startup that runs the infrastructure developers use to build and test code, has raised a $66 million Series C led by Sequoia Capital at a $1 billion valuation, Fortune reported.

The round comes about two months after Blacksmith's $45 million Series B, led by Peak XV Partners at a $550 million valuation, and brings its total funding to about $124.5 million.

What Blacksmith Does

Before code can be merged and deployed, it typically runs through continuous integration, or CI: automated builds and tests that catch bugs before they reach production. Blacksmith provides the compute behind that process.

Unlike most competitors, which rent capacity from cloud providers, Blacksmith buys its own machines, tens of thousands of them according to co-founder and CEO Aditya "JP" Jayaprakash, and installs them in data centers around the world. It also builds its own software to avoid repeating setup work in every test run, which speeds up builds and lowers costs.

The company was founded in 2024 by Jayaprakash, Aayush Shah and Aditya Maru. It has about 40 employees across San Francisco and New York and plans to reach about 75 by the end of the year.

How It Will Use the Funding

Most of the new capital will go toward buying more computing power to keep up with demand.

Why It Matters Now

AI coding tools have made writing software dramatically faster, and that has moved the bottleneck downstream. "But now the bottleneck has shifted to the second piece, which is: how do I actually validate all this code?" Jayaprakash told Fortune.

Blacksmith's numbers show how fast that shift is happening. The company now serves more than 10,000 companies, up from about 5,000 in August, including Granola, Handshake, Supabase and LangChain. It ran 5 million validation checks per week at the start of the year and now runs 90 million. Annual recurring revenue has grown 17-fold over the same period to the tens of millions, and its largest customers spend more than $1 million a year.

New model releases show up directly in its traffic. According to Fortune, CI volume on Blacksmith jumped 40% after Anthropic launched Claude Fable 5 in July, and Anthropic's own validation workloads grew 25-fold in six months. "Usage on us actually goes up," Jayaprakash said of new model launches.

That dynamic makes Blacksmith something of a picks-and-shovels play on AI coding. It does not need to win the race between coding assistants; it benefits whenever any of them gets better and developers ship more code as a result.

Owning hardware is a capital-intensive strategy, but it gives Blacksmith control over performance and margins at a moment when demand is compounding. Sequoia's bet is that every leap in AI coding will push more code through CI pipelines, and that the company running the fastest, cheapest pipes will capture a growing share of that spend. Reaching a $1 billion valuation in roughly two years suggests investors think that share could get very large.

Source

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