Blacksmith Hits $1 Billion Valuation as AI-Written Code Swamps Testing

Blacksmith, the startup that runs the infrastructure companies use to test code before it ships, is now valued at $1 billion after closing a $66 million Series C led by Sequoia Capital.

The round lands roughly two months after the company raised a $45 million Series B led by Peak XV Partners at a $550 million valuation. Total funding now sits at about $124.5 million, the company said.

The pace of the back-to-back raises tracks the pace of the business. Blacksmith says more than 10,000 companies now use its platform, up from about 5,000 in August. Customers include Granola, Handshake, Supabase and LangChain. At the start of the year the company ran 5 million validation checks a week; it now runs 90 million.

Annual recurring revenue has grown 17x over the same period, according to cofounder and CEO Aditya Jayaprakash, who said revenue is now in the tens of millions. The company's largest customers spend more than $1 million a year.

Jayaprakash told Fortune that most of the new money will go toward purchasing more computing power. Blacksmith has about 40 employees across San Francisco and New York and plans to reach roughly 75 by year-end.

What does Blacksmith actually sell?

Founded in 2024 by Jayaprakash, the company sells what developers call continuous integration, or CI: the automated builds and tests that code must pass before it merges into an existing codebase and deploys.

Most companies run those jobs on servers rented from AWS, Google Cloud or Microsoft Azure. Blacksmith takes a different route. It buys its own machines — tens of thousands of them, according to Jayaprakash — and installs them in data centers around the world. It writes its own software to run the fleet, including systems that save the repetitive setup work each test run would otherwise redo from scratch.

Owning the hardware gives Blacksmith control over performance, Jayaprakash says. It also exposes the company to the industry-wide shortage of compute and memory. He called capacity planning one of the hardest parts of the business, because demand jumps every time a stronger model ships. When Anthropic launched Claude Fable 5 in July, CI volume on Blacksmith rose 40%, he said.

Why has code validation become a bottleneck?

Developers used to spend about half their time writing code and the other half waiting for it to build and pass checks, Jayaprakash said. AI coding tools like Cursor, OpenAI's Codex and Anthropic's Claude Code have made the first half "extremely easy," he said.

"But now the bottleneck has shifted to the second piece, which is: how do I actually validate all this code?" Jayaprakash said.

Even the leading labs are feeling the strain. Anthropic said last month that its own validation workloads grew 25-fold in six months as Claude took over most of its code output.

Could the AI giants swallow this market?

The obvious risk is disintermediation. Coding agents like Codex and Claude Code can already run a project's tests as they work. Cursor launched a product in March that lets companies set up agents to automatically review and test new code. Microsoft-owned GitHub sells its own hosted machines for running CI jobs.

Jayaprakash argues Blacksmith is complementary to what the AI model companies do, because better models mean more code to check. "Usage on us actually goes up," he said.

The bet for Sequoia is that the flood of machine-written code keeps compounding faster than the model vendors can absorb the validation layer themselves. Blacksmith's 17x revenue growth in under a year says that, for now, the flood is winning.