On-demand AI cloud startup Runpod—which was founded by tech entrepreneurs Lu and Singh—has turned that original hobby into a massive marketplace. Along the way, they’ve grown to an incredible $120 million ARR. Originally due to conclude in 2023, they began their journey in late 2021. With immense excitement they converted their Bitcoin rigs into AI servers and began innovative machine learning ventures. They made their first official foray into offering AI hosting in 2022. All of this occurred just before the rapid proliferation of generative AI and other applications turned everybody’s heads.
Lu and Singh’s vision is clear: they aspire for Runpod to become the foundational platform for the next generation of software developers. Their commitment to this goal has resonated with a diverse customer base, which now includes 500,000 developers, ranging from individual coders to teams within Fortune 500 companies.
Their personal experience on the current software stack was maddening. We discovered it was god-awful, which created the need for reliable GPU infrastructure.
“We were seeing how really god-awful the software stack was for dealing with these GPUs,” Lu shared.
The pair realized there was a massive opportunity in the market and wanted to make their move. They had the added challenge of needing to use their mining rigs and building a user-friendly platform. In fact, Lu described the situation as having “the actual experience of developing software on top of GPUs [to be] just hot garbage.”
Lu and Singh knew they were hell-bent on pursuing their vision. They funded their hobby using their personal savings and convinced their spouses to fund the effort jointly with nearly $50,000. Even with all that passion and dedication, they had a hard time convincing outside funders in those early days.
“It was almost two years where we really didn’t have any funding,” Lu remarked, reflecting on the challenges they faced during their startup’s early days.
Runpod’s breakthrough came quickly. They made their launch and within only nine months hit $1 million top line revenue. In that time, their community exploded to over 100,000 developers. The sustainability promise Investors were mesmerized by this torrid growth. Their reply was a big $20m seed round, co-led by the venture capital arms of Dell and Intel, with participation from heavyweights including Nat Friedman and Julien Chaumond, co-founder of Hugging Face.
Chaumond’s involvement was particularly significant as he became an angel investor after utilizing Runpod’s services and reaching out through the support chat. Recognizing this connection began a new focus on fostering relationships outside the tech community.
Dell Technologies Capital’s Radhika Malik was key in helping Lu and Singh navigate through the investment process.
“She was super helpful to us, even at the first conversation,” Lu noted.
As Runpod rides its wave of success, its founders have their eyes on a new round of funding. With a robust business model and a growing customer base that includes clients such as Replit, Cursor, OpenAI, Perplexity, Wix, and Zillow, they are optimistic about securing a healthy Series A round.
Singh stressed the growing importance of keeping their GPUs always available for on-demand access to their customers.
“If we don’t have the GPUs, the market sentiment, the user sentiment changes. Because when they don’t see capacity from you, they go somewhere else,” he explained.
Runpod’s cloud infrastructure is now more than 31 regions worldwide, the utilization providing developers around the world with access to this powerful technology. This expansion significantly increases their operational capacity. It further cements their brand as a trusted, secure leader in the burgeoning AI hosting space.
Looking ahead, Lu and Singh aim to solidify Runpod’s position as an essential resource for developers entering the AI landscape. Their journey illustrates not only the potential for growth within this sector but the importance of innovation and adaptability in an evolving market.
“Our goal is to be what this next generation of software developers grows up on,” Lu stated, encapsulating their vision for Runpod.
