AI code testing startup Blacksmith raises $66 million at $1 billion valuation

Securing a billion-dollar valuation

Blacksmith, an infrastructure startup focused on software testing, recently secured $66 million in a Series C funding round. This investment was led by Sequoia Capital and included participation from Premji Invest, Peak XV Partners, GV, and Y Combinator. The funding brings the company's total capital raised to approximately $125 million.

The latest round values the startup at $1 billion, a significant jump from its March 2026 Series B round. During that previous round, the company was valued at $550 million. This rapid valuation growth reflects the increasing importance of reliable testing systems in the modern software development lifecycle.

The company plans to use this new capital to grow its team and expand its computing infrastructure. This expansion is a direct response to the growing demand for software testing as more companies adopt AI-powered coding tools. The founders, who met at the University of Waterloo, aim to provide the backbone for these high-speed development workflows.

Solving the AI coding bottleneck

The primary problem Blacksmith addresses is the strain on continuous integration (CI) systems. CI is the process of running automated checks on code changes before they are merged into a larger codebase. As AI coding agents become more common, developers are producing code at a much faster rate than ever before.

Aditya Jayaprakash, the co-founder and CEO of Blacksmith, noted that developers who once submitted three or four pull requests a day are now producing substantially more. This surge in output has left many engineering teams struggling because their existing CI infrastructure cannot keep up with the volume of new code. This creates a bottleneck where the speed of creation outpaces the speed of verification.

Blacksmith provides the infrastructure needed to manage these automated checks without requiring customers to scale their own hardware. By offloading the management of these systems, companies can focus on writing software rather than maintaining the servers that test it. This shift is becoming essential as AI-generated code places greater emphasis on the systems used to validate software before it is released to the public.

Performance and cost efficiency

Blacksmith claims its platform can complete CI jobs twice as fast while reducing costs for customers by an average of 60%. These metrics are significant for large engineering teams that need to maintain high velocity without ballooning their operational expenses. The startup reports that its platform helps reduce the burden of managing complex CI systems for its clients.

The company has seen a massive spike in usage since early 2026. The number of CI jobs processed on the platform rose from five million in January 2026 to more than 90 million per week. This growth corresponds with a 17-fold increase in annual recurring revenue over that same period, demonstrating a rapid adoption of the service by the tech industry.

Real-world users have already reported benefits from the platform. Joaquin Borggio, a LangChain infrastructure engineer, stated that the service reduced the burden of managing CI systems while cutting runner costs by roughly 40%. He noted that these savings do not even account for the engineering time saved by using the automated infrastructure. This highlights the dual value of the platform: it saves both money and human labor.

Scaling for the future

To meet the growing demand, Blacksmith currently manages nearly 10 megawatts of computing capacity across data centers in the United States and Europe. The company has ambitious plans to expand this capacity at least fivefold by 2027. This massive scaling effort is necessary to support the thousands of companies already using the platform, including names like Ashby, Granola, Handshake, and LangChain.

Sequoia Capital partner Isaiah Boone noted that Blacksmith recognized early on that AI-generated code would require fundamental changes to software testing infrastructure. He attributed the investment to the founding team's deep systems expertise and their ability to execute quickly. The team's background in engineering at companies like Cockroach Labs and Faire provided the technical foundation for this specialized infrastructure.

As AI agents continue to integrate into the developer workflow, the need for high-performance testing will only intensify. Blacksmith is positioning itself as a critical layer in the software stack, ensuring that the rapid output of AI does not lead to a decrease in software quality. The next phase of their growth will depend on their ability to maintain this speed while scaling their physical and cloud computing resources.