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

Blacksmith, which sells the infrastructure companies use to test code before it ships, has reached a $1 billion valuation after raising $66 million in a new round led by Sequoia Capital. The Series C comes only about two months after its $45 million Series B, led by Peak XV Partners at a $550 million valuation. Altogether, the startup says it has raised about $124.5 million.

The timing makes sense if you listen to developers. AI coding tools have made writing code easier, but they’ve also pushed the bottleneck somewhere less glamorous: validation. Blacksmith’s CEO, Aditya Jayaprakash, says developers used to split their time between writing code and waiting for builds and tests. Now, with tools like Cursor, OpenAI’s Codex and Anthropic’s Claude Code speeding up the first part, the second part has become the pain point.

Blacksmith says more than 10,000 companies use its platform, up from about 5,000 in August. Its customers include Granola, Handshake, Supabase and LangChain. The company says its annual recurring revenue has grown 17 times since the start of the year and is now in the tens of millions. Its largest customers spend more than $1 million a year.

Behind the scenes, Blacksmith is taking a very different approach from the usual cloud setup. Instead of renting servers from AWS, Google Cloud or Microsoft Azure, it buys its own machines — tens of thousands of them, according to Jayaprakash — and places them in data centers around the world. That gives it more control over performance, but also leaves it exposed to the same compute and memory shortages everyone else is fighting.

The scale jump has been sharp. Blacksmith says it went from 5 million validation checks a week at the start of the year to 90 million now. Jayaprakash says the company has about 40 employees across San Francisco and New York and plans to reach around 75 by the end of the year. Most of the new funding, he said, will go toward buying more computing power. And if AI models keep getting stronger, the demand for checks seems likely to keep climbing too.